Qualcomm stock tests diversification as handset revenue falls 26%

Qualcomm's fiscal 2026 results put the company's diversification strategy at the center of the investment case. In its earnings release on November 4, Qualcomm said automotive and Internet of Things revenue had grown strongly, while handset demand weakened and higher semiconductor input costs pressured the outlook.

Qualcomm stock traded at 161.75 euros on Lang & Schwarz at 15:06 CET on Wednesday, November 11, 2026.

Handsets Remain the Main Drag

Qualcomm's fourth-quarter fiscal 2026 revenue fell 8 percent year over year to 10.322 billion US dollars under GAAP. Non-GAAP revenue declined 7 percent to 10.442 billion US dollars, while non-GAAP diluted earnings per share fell 28 percent to 2.17 US dollars. The company said the adjusted revenue figure landed at the high end of its guidance range.

The QCT semiconductor segment generated 9.015 billion US dollars of revenue, down 8 percent. Handset revenue fell 26 percent to 5.137 billion US dollars. Qualcomm attributed the pressure to industry-wide memory dynamics affecting the global smartphone market. The result also reflects the continuing challenge of reducing dependence on mobile devices.

Cars and Data Centers Gain Weight

Automotive revenue provided the clearest counterweight. QCT automotive revenue reached 1.990 billion US dollars, an increase of 89 percent from the prior-year quarter and the segment's first quarter above 2 billion US dollars on a reported basis. Qualcomm said its automotive business exited fiscal 2026 at an annualized revenue run rate of roughly 8 billion US dollars, ahead of its earlier 7 billion US dollar expectation.

IoT revenue rose 4 percent to 1.888 billion US dollars in the quarter. Qualcomm said combined automotive and IoT revenue increased 36 percent year over year in the quarter. Chief Executive Cristiano Amon described fiscal 2027 as the start of a non-handset revenue inflection, including the ramp of the company's Data Center business.

Management reiterated a fiscal 2027 Data Center revenue target of 5 billion US dollars. The first-quarter fiscal 2027 outlook includes Data Center revenue in QCT and calls for more than 650 million US dollars from the business as shipments to custom-silicon customers begin. Qualcomm also expects non-handset revenue to grow by more than 60 percent year over year.

Margins Will Test the Strategy

Qualcomm expects first-quarter fiscal 2027 revenue of 10.4 billion to 11.2 billion US dollars and non-GAAP diluted earnings per share of 2.15 to 2.35 US dollars. QCT revenue guidance is 9.0 billion to 9.6 billion US dollars, while QTL licensing revenue is expected at 1.3 billion to 1.5 billion US dollars.

The outlook carries an execution risk beyond demand. Qualcomm said the semiconductor industry is facing higher costs for wafer fabrication, assembly, testing, advanced packaging, memory and other materials. Pricing actions are intended to offset those costs, but the company expects their full benefit to reach QCT gross margins only in the second half of fiscal 2027.

Reported full-year GAAP net income benefited from a 5.7 billion US dollar tax benefit tied to the release of a valuation allowance. That item lifted fiscal 2026 GAAP diluted earnings per share to 12.70 US dollars, while non-GAAP diluted earnings per share was 10.54 US dollars, down 12 percent from the prior year. The adjusted figure provides the cleaner view of operating performance, but the tax benefit remains material for the reported result.

For investors, the central question is whether automotive and Data Center growth can offset a weaker handset cycle before pricing actions and new infrastructure products lift margins. The next fiscal first-quarter report is expected to provide the first substantial check on Data Center shipments, QCT profitability and the pace of smartphone weakness.

Broader US equity-market sentiment remains an important backdrop for Qualcomm stock, with investors also watching the S&P 500.

More news and analysis on Qualcomm stock is available on the company topic page.