For Qualcomm investors, Wednesday’s results placed a 26% fall in handset chip sales beside the company’s plans to expand its data-centre and automotive businesses.
Its shares fell 7% in extended trading as investors weighed weaker smartphone sales, below-consensus earnings guidance and the unproven scale of its newer data-centre and automotive businesses.
Earlier on Wednesday, Qualcomm announced a deal to provide technology for SpaceX’s cellular buildout.
Qualcomm then reported results for the quarter ended 27 September, with GAAP revenue of $10.3 billion and non-GAAP earnings of $2.17 a share. The earnings beat quarterly estimates, though they were down 28% from a year earlier.
Its largest revenue source, handset chips, brought in $5.14 billion, down 26% and below the StreetAccount estimate of $5.21 billion. Adjusted company revenue fell 7% from a year earlier.
For the current quarter, Qualcomm forecast earnings per share of $2.15 to $2.35 on revenue of $10.4 billion to $11.2 billion. The midpoint of its earnings range was below the average analyst estimate of $2.32 a share.
The company said it was beginning to see sequential handset growth and that Android shipments in China had bottomed. It nevertheless expects the handset market to be flat in 2027.
Cristiano Amon, Qualcomm’s chief executive, said the company faced a supply constraint rather than a shortage of buyers. “We don't have a demand issue; it's a supply issue. If I had more supply, I would probably be doing better.”
Outside handsets, Qualcomm reported automotive revenue of $1.99 billion, up 89% from a year earlier and above StreetAccount expectations of $1.66 billion. Internet-of-things revenue rose 4% to $1.88 billion, slightly ahead of estimates.
Data-centre revenue reached $650 million during the quarter, largely from customisation and connectivity work. Amon said Qualcomm expects $5 billion in data-centre revenue in fiscal 2027 and reiterated a fiscal 2029 target of more than $15 billion.
Qualcomm also announced a multi-generational product collaboration with Amazon for AI data centres. Meta Platforms is set to use Qualcomm’s Dragonfly C1000 server processors, which are expected to be available in 2028.
Amon said non-handset revenue was projected to grow more than 60% in fiscal 2027. Qualcomm raised its fiscal 2029 non-handset revenue target to $40 billion, including $10 billion in automotive revenue and more than $14 billion in internet-of-things revenue.
During the quarter, Qualcomm renewed long-term patent licence agreements with Apple, Huawei and Transsion. It also agreed to acquire AI software startup Modular in an all-stock deal valued at $3.92 billion.
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