SAN DIEGO, April 29, 2026, 15:02 PDT
Qualcomm shares jumped late Wednesday following a better-than-expected adjusted profit and hints from the chipmaker that China’s smartphone slump could be easing, though its third-quarter forecast missed analyst estimates. Investors shifted focus fast, shrugging off the tepid handset outlook and turning instead to Qualcomm’s ambitions in data centers.
This is key for Qualcomm, which wants to show it’s moved beyond being seen as a pure smartphone-chip play. Soaring memory-chip prices have pushed up costs for both phones and PCs, damping appetite. Investors, for their part, are still waiting for proof that areas like automotive chips, connected hardware, and AI data-center silicon can start to shoulder more of the business.
Not the best moment for Qualcomm. Its roster includes Apple, Samsung, and the big names in China, but global smartphone shipments dropped 6% in the first quarter, Counterpoint Research told Reuters. As for the memory shortage, that could drag on through late next year, according to Reuters.
Qualcomm’s fiscal second-quarter revenue came in at $10.599 billion, slipping 3% year-over-year on a GAAP basis. Adjusted earnings per share landed at $2.65, a touch above the $2.56 average forecast tracked by Seeking Alpha. GAAP net income soared to $7.37 billion, or $6.88 per share, after factoring in a $5.7 billion tax benefit—though that windfall didn’t show up in the adjusted numbers.
One thing stood out: QCT, the semiconductor unit at Qualcomm, saw handset revenue slide to $6.024 billion—a 13% drop from last year. Auto chips, on the other hand, jumped 38% to $1.326 billion. For IoT, revenue climbed 9%, landing at $1.726 billion.
Qualcomm set third-quarter revenue guidance in the $9.2 billion to $10.0 billion range, with adjusted EPS pegged between $2.10 and $2.30—both under LSEG estimates Reuters highlighted. The company cited memory supply constraints and their knock-on effect on pricing and demand from a number of handset manufacturers as part of its outlook. The forecast landed softer than investors typically prefer.
Qualcomm CEO Cristiano Amon told Reuters he’s confident the smartphone market will begin to recover after the fiscal third quarter. “We can now call the bottom,” Amon said. He pointed to Qualcomm’s licensing business as a window into phone makers’ plans for the rest of the year. Reuters
Amon flagged data centers as another area to watch. Qualcomm still expects to deliver its custom silicon to a “leading hyperscaler”—industry speak for a top cloud player—sometime before the year wraps. AI agents are forcing changes throughout Qualcomm’s product roadmap, Amon said, touching “every platform.” Qualcomm
That brings Qualcomm nearer to a space where Broadcom and Marvell already supply key custom chips. Amon told Reuters the company is developing CPUs, inference accelerators—chips that power AI models—and ASICs, or application-specific integrated circuits made for a single customer or use.
Qualcomm’s push outside its core smartphone business is gaining traction, according to Bob O’Donnell, president and chief analyst at TECHnalysis Research. Automotive and data-center segments are now in the mix, O’Donnell told Reuters, though he called it “building from a small base.” Still, he said, the wider data-center play signals a “maturation of their strategy.” Reuters
Still, there are some hurdles. Qualcomm’s outlook is clouded by soft memory demand, significant reliance on China, and the chance that customers might step up efforts to make their own chips—that’s vertical integration. These risks were flagged by the company as factors that could push actual results away from its current projections.
Qualcomm, for its part, cited capital returns as a pillar this quarter. The chipmaker handed back $3.7 billion to shareholders in the second quarter—$2.8 billion of that through buybacks. Repurchases totaled $5.4 billion for the first half of fiscal 2026. On top of that, the company rolled out a fresh $20 billion repurchase authorization not long ago.
Before the quarter wraps, another test arrives. Qualcomm plans to brief investors on growth projects—think data center and physical AI—at its investor day set for June 24. For the moment, the market seems to accept those future bets as cover for the weaker near-term phone outlook.
