We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Qualcomm (QCOM) Up 8.7% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
A month has gone by since the last earnings report for Qualcomm (QCOM - Free Report) . Shares have added about 8.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Qualcomm due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for QUALCOMM Incorporated before we dive into how investors and analysts have reacted as of late.
Qualcomm Misses Q3 Earnings Estimates, Revenues Beat on Auto Growth
Qualcomm reported third-quarter fiscal 2026 non-GAAP earnings of $2.21 per share, down 20% year over year and missing the Zacks Consensus Estimate of $2.22 by 0.5%. Revenues of $9.95 billion fell 4% year over year but topped the consensus mark of $9.71 billion by 2.4%.
Higher input costs and handset weakness pressured profitability, while record automotive sales and IoT growth supported the top line. QCT automotive revenues surged 61% to $1.59 billion, marking the 23rd straight quarter of double-digit year-over-year growth.
Handset Weakness Drags on QCT Results
QCT revenues declined 5% to $8.50 billion. Handset revenues plunged 20% to $5.09 billion as major OEMs reduced chipset purchases and worked down inventory amid memory supply constraints and higher memory prices.
The handset decline more than offset gains elsewhere in the product business. Management estimated that China OEM handset revenues reached a bottom in the quarter and expects double-digit sequential growth in the fourth quarter as channel inventory drawdowns ease.
Qualcomm Extends Automotive and IoT Momentum
Automotive revenues rose $604 million year over year, driven by a $381 million increase in revenue per unit from favorable mix and higher average selling prices. Another $223 million came from higher shipments tied to new vehicle launches using Snapdragon digital cockpit and ADAS and automated-driving products.
IoT revenues climbed 9% to $1.83 billion, led by favorable mix and growth in industrial networking and robotics. Combined QCT automotive and IoT revenues advanced 28%, and Qualcomm raised its fiscal 2026 exit-rate outlook for annualized automotive sales to approximately $7 billion from $6 billion.
Margins Narrow as Product Costs Rise
QCT EBT declined 18% to $2.19 billion, while its EBT margin contracted four percentage points to 26%. Higher product costs and lower revenues outweighed higher average selling prices, reflecting industrywide increases across wafers, assembly, testing, advanced packaging, memory and other materials.
QTL revenues decreased 3% to $1.28 billion, and EBT fell 6% to $881 million. Its EBT margin slipped to 69% from 71%, as lower estimated cellular-product sales and fewer prior-period royalty adjustments offset a favorable revenue-per-unit mix.
Qualcomm Invests in Data Center Expansion
GAAP research and development spending increased $381 million to $2.61 billion, primarily because of higher wireless and integrated-circuit development costs, lower engineering reimbursements and more share-based compensation. Selling, general and administrative expenses rose $205 million to $976 million, partly reflecting greater compensation and growth investments.
The spending supports a phased data center roadmap spanning connectivity, custom silicon, AI accelerators and server CPUs. Two custom-silicon wins are expected to begin generating revenues in the December quarter, while the company completed the $3.1 billion Modular acquisition to add an open, hardware-agnostic AI software platform.
Cash Flow & Liquidity
Qualcomm returned $2.3 billion to stockholders during the quarter, including $1.4 billion in repurchases and $973 million in dividends. At quarter-end, $20.6 billion remained under its repurchase authorization.
Cash, cash equivalents and marketable securities totaled $8.30 billion at June 28, down $1.85 billion from fiscal year-end, while debt was $15.27 billion. Nine-month operating cash flow fell $1.61 billion to $8.41 billion, partly as inventory increased amid memory-related customer demand shifts.
Guidance
For the fourth quarter of fiscal 2026, Qualcomm forecasts revenues of $9.7-$10.5 billion and non-GAAP earnings of $2.05-$2.25 per share. QCT revenues are projected at $8.4-$9.0 billion with a 23-25% EBT margin, while QTL revenues are expected between $1.2 billion and $1.4 billion.
QCT handset revenues are expected to be about $5.2 billion, with Android growth offset by lower Apple product sales. Qualcomm expects its modem share in the upcoming iPhone launch to be materially below the prior 20% estimate, while fourth-quarter automotive revenues are projected to rise approximately 60% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -12.97% due to these changes.
VGM Scores
Currently, Qualcomm has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Qualcomm has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Qualcomm is part of the Zacks Electronics - Semiconductors industry. Over the past month, Navitas Semiconductor Corporation (NVTS - Free Report) , a stock from the same industry, has gained 13.6%. The company reported its results for the quarter ended June 2026 more than a month ago.
Navitas Semiconductor reported revenues of $10.53 million in the last reported quarter, representing a year-over-year change of -27.3%. EPS of -$0.04 for the same period compares with -$0.05 a year ago.
Navitas Semiconductor is expected to post a loss of $0.04 per share for the current quarter, representing a year-over-year change of +20%. Over the last 30 days, the Zacks Consensus Estimate has changed +16.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Navitas Semiconductor. Also, the stock has a VGM Score of F.
View the Zacks #1 Rank List
Image: Bigstock
Qualcomm (QCOM) Up 8.7% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Qualcomm (QCOM - Free Report) . Shares have added about 8.7% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Qualcomm due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for QUALCOMM Incorporated before we dive into how investors and analysts have reacted as of late.
Qualcomm Misses Q3 Earnings Estimates, Revenues Beat on Auto Growth
Qualcomm reported third-quarter fiscal 2026 non-GAAP earnings of $2.21 per share, down 20% year over year and missing the Zacks Consensus Estimate of $2.22 by 0.5%. Revenues of $9.95 billion fell 4% year over year but topped the consensus mark of $9.71 billion by 2.4%.
Higher input costs and handset weakness pressured profitability, while record automotive sales and IoT growth supported the top line. QCT automotive revenues surged 61% to $1.59 billion, marking the 23rd straight quarter of double-digit year-over-year growth.
Handset Weakness Drags on QCT Results
QCT revenues declined 5% to $8.50 billion. Handset revenues plunged 20% to $5.09 billion as major OEMs reduced chipset purchases and worked down inventory amid memory supply constraints and higher memory prices.
The handset decline more than offset gains elsewhere in the product business. Management estimated that China OEM handset revenues reached a bottom in the quarter and expects double-digit sequential growth in the fourth quarter as channel inventory drawdowns ease.
Qualcomm Extends Automotive and IoT Momentum
Automotive revenues rose $604 million year over year, driven by a $381 million increase in revenue per unit from favorable mix and higher average selling prices. Another $223 million came from higher shipments tied to new vehicle launches using Snapdragon digital cockpit and ADAS and automated-driving products.
IoT revenues climbed 9% to $1.83 billion, led by favorable mix and growth in industrial networking and robotics. Combined QCT automotive and IoT revenues advanced 28%, and Qualcomm raised its fiscal 2026 exit-rate outlook for annualized automotive sales to approximately $7 billion from $6 billion.
Margins Narrow as Product Costs Rise
QCT EBT declined 18% to $2.19 billion, while its EBT margin contracted four percentage points to 26%. Higher product costs and lower revenues outweighed higher average selling prices, reflecting industrywide increases across wafers, assembly, testing, advanced packaging, memory and other materials.
QTL revenues decreased 3% to $1.28 billion, and EBT fell 6% to $881 million. Its EBT margin slipped to 69% from 71%, as lower estimated cellular-product sales and fewer prior-period royalty adjustments offset a favorable revenue-per-unit mix.
Qualcomm Invests in Data Center Expansion
GAAP research and development spending increased $381 million to $2.61 billion, primarily because of higher wireless and integrated-circuit development costs, lower engineering reimbursements and more share-based compensation. Selling, general and administrative expenses rose $205 million to $976 million, partly reflecting greater compensation and growth investments.
The spending supports a phased data center roadmap spanning connectivity, custom silicon, AI accelerators and server CPUs. Two custom-silicon wins are expected to begin generating revenues in the December quarter, while the company completed the $3.1 billion Modular acquisition to add an open, hardware-agnostic AI software platform.
Cash Flow & Liquidity
Qualcomm returned $2.3 billion to stockholders during the quarter, including $1.4 billion in repurchases and $973 million in dividends. At quarter-end, $20.6 billion remained under its repurchase authorization.
Cash, cash equivalents and marketable securities totaled $8.30 billion at June 28, down $1.85 billion from fiscal year-end, while debt was $15.27 billion. Nine-month operating cash flow fell $1.61 billion to $8.41 billion, partly as inventory increased amid memory-related customer demand shifts.
Guidance
For the fourth quarter of fiscal 2026, Qualcomm forecasts revenues of $9.7-$10.5 billion and non-GAAP earnings of $2.05-$2.25 per share. QCT revenues are projected at $8.4-$9.0 billion with a 23-25% EBT margin, while QTL revenues are expected between $1.2 billion and $1.4 billion.
QCT handset revenues are expected to be about $5.2 billion, with Android growth offset by lower Apple product sales. Qualcomm expects its modem share in the upcoming iPhone launch to be materially below the prior 20% estimate, while fourth-quarter automotive revenues are projected to rise approximately 60% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -12.97% due to these changes.
VGM Scores
Currently, Qualcomm has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Qualcomm has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Qualcomm is part of the Zacks Electronics - Semiconductors industry. Over the past month, Navitas Semiconductor Corporation (NVTS - Free Report) , a stock from the same industry, has gained 13.6%. The company reported its results for the quarter ended June 2026 more than a month ago.
Navitas Semiconductor reported revenues of $10.53 million in the last reported quarter, representing a year-over-year change of -27.3%. EPS of -$0.04 for the same period compares with -$0.05 a year ago.
Navitas Semiconductor is expected to post a loss of $0.04 per share for the current quarter, representing a year-over-year change of +20%. Over the last 30 days, the Zacks Consensus Estimate has changed +16.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Navitas Semiconductor. Also, the stock has a VGM Score of F.