Qualcomm shares have been under pressure ahead of the company’s fiscal third-quarter results scheduled for release after the market close on Wednesday, July 29. The stock has fallen sharply from its 52-week high, as investors weigh weaker handset demand signals against a more resilient mix in automotive, Internet of Things, and licensing.
In its latest reported quarter, Qualcomm pointed to a challenging memory backdrop that is affecting handset customers’ purchasing conditions and product cycles—while simultaneously highlighting growth areas outside smartphones. The focus for Wednesday will be whether management’s guidance addresses the near-term handset environment, particularly for Chinese customers, and how quickly diversification can offset weakness in memory-constrained devices.
Key takeaways
- Price move: Qualcomm is trading about 37% below its 52-week high of $259.92, with the stock down roughly 36% versus the average analyst price target.
- Catalyst: Fiscal third-quarter results are due after the market close on Wednesday, July 29.
- Handset pressure: Handset chip revenue fell 13% year over year in the most recently reported period, reflecting a broader industry squeeze tied to memory pricing.
- Offsetting growth: Automotive revenue rose 38% year over year to a record $1.3 billion, and licensing posted 72% pre-tax margin, supporting the diversification thesis.
- Implication: Investors will closely track whether guidance confirms a bottom in Chinese handset revenue and whether automotive momentum can keep compounding.
What drove the caution into the print
Qualcomm’s most recently reported results showed that revenue softness remains concentrated in handset-related sales. Revenue for the fiscal second quarter (ended March 29, 2026) was $10.6 billion, down 3% year over year, while adjusted earnings per share declined 7% to $2.65, according to the company’s earnings release.
Handset chips, which account for the largest portion of the company’s chip revenue, fell to $6.0 billion—down 13% from the prior-year period. While Qualcomm said it delivered results in line with guidance, management flagged a “challenging memory environment,” tying the near-term outlook to memory pricing dynamics that have strained smartphone buyer budgets.
Investors are also watching for updated signals on customer demand constraints. Qualcomm reportedly told customers on July 24 that it would raise chip prices by double digits on products shipped after Sept. 1, a move that underscores how pricing and supply-demand conditions are shifting in the lead-up to guidance.
For the quarter Qualcomm is set to report Wednesday, management’s guidance calls for revenue between $9.2 billion and $10.0 billion, with adjusted earnings per share expected at $2.10 to $2.30. The guidance cited memory supply constraints affecting demand from multiple handset makers and included a specific expectation that handset revenue from Chinese customers would bottom in the reported quarter before returning to sequential growth the following one.
Another overhang remains Qualcomm’s long-running modem transition risk tied to Apple. The iPhone maker began shipping phones with its own in-house modem chip in early 2025 and has reportedly been working toward reducing Qualcomm modem usage across its lineup through 2027. The issue intersects with the same handset segment now facing memory-driven budget pressure, increasing investor focus on how quickly Qualcomm can stabilize the smartphone-related earnings stream.
Where Qualcomm’s investors see upside
Despite handset weakness, Qualcomm’s diversification narrative looks stronger in parts of its portfolio. Automotive revenue increased 38% year over year to a record $1.3 billion in the fiscal second quarter, and Internet of Things (IoT) revenue grew 9% to $1.7 billion. Together, automotive and IoT contributed 20% growth and represented about a third of chip segment revenue, according to the company’s report.
Qualcomm’s licensing business also provided a margin cushion. The company reported that licensing added $1.4 billion on top of other segments, with a 72% pre-tax margin, highlighting the durability of its cellular technology royalty model even when device cycles are uneven.
Management is also pursuing data center opportunities. Qualcomm said at its investor day in June that it aims for more than $15 billion of data center revenue by fiscal 2029, up from about $300 million this year. CEO Cristiano Amon indicated that a custom silicon engagement with a leading hyperscaler remains on track for initial shipments later this calendar year.
Finally, Qualcomm continues to return capital to shareholders. In the fiscal second quarter, the company paid out and repurchased $3.7 billion, bought back $5.4 billion of stock in the first half of its fiscal year, and announced a new $20 billion repurchase authorization. The company’s dividend yields about 2.2% at the current share price, according to the article’s figures.
Market reaction and what to watch Wednesday
With analysts still largely rating the stock as a hold, the gap between valuation and the average price target reflects a disagreement between how investors price the near-term handset cycle and how analysts view Qualcomm’s longer-term diversification. The key question is whether the company can validate its handset outlook—especially for Chinese customers—while maintaining momentum in automotive and other non-handset growth drivers.
Heading into Wednesday afternoon, investors will likely focus on two checkable items highlighted by management: whether the forecast implies handset revenue from Chinese customers has already found a bottom, and whether automotive results show continued acceleration comparable to the prior quarter’s pace. Any evidence that handset weakness extends beyond management’s described timing could intensify concerns, while clearer stabilization would help reset expectations for smartphone-related earnings.
More broadly, traders will also digest how Qualcomm frames the memory environment into the rest of the year, as well as progress updates on data center custom silicon shipments and ongoing capital return plans. With fiscal third-quarter results set to come out after the close, Wednesday’s guidance and segment commentary are expected to determine whether the recent pullback is viewed as a temporary cycle-driven discount or a sign of longer-lasting smartphone softness.
