Prabhu RamQualcomm’s latest quarterly results highlight a company balancing softness in its traditional smartphone business with strong momentum in newer growth engines – Automotive, IoT and AI infrastructure. The results reflect a broader shift underway at the company as it works to reduce its historical reliance on mobile chipsets.
Revenue reached US$9.9Bn, near the top of guidance, even as investors weighed near-term pressures against the company’s longer-term diversification story.
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QCT handset revenue declined 20% YoY to US$5.09Bn as OEMs pulled back on chipset purchases and worked through existing inventory, a slowdown compounded by elevated DRAM and NAND prices squeezing margins across the supply chain. Qualcomm believes China demand has bottomed out and expects a sequential recovery as channel inventories normalize over the coming quarters. In sharp contrast, Automotive revenue surged 61% YoY to a record US$1.6Bn, extending its streak to 23 consecutive quarters of double-digit YoY gains โ one of the most consistent growth stories in the semiconductor space. IoT revenue grew 9% YoY to US$1.83Bn, led by strength in industrial networking and robotics applications.
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Qualcomm is steadily reducing its dependence on smartphones. Automotive and IoT together grew 28% YoY, prompting management to raise its FY2026 automotive exit-rate target to US$7Bn.
Qualcomm also lifted its FY2029 non-handset revenue target from US$22Bn to US$40Bn, including over US$24Bn from Automotive and IoT combined, and more than US$15Bn projected from Data Center โ underscoring its growing ambitions in AI infrastructure.
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Near-term challenges persist, including weaker Apple-related revenue, memory-driven margin pressure and a subdued handset market. Yet Qualcomm’s long-term narrative is increasingly shifting toward AI compute, connected vehicles and intelligent edge infrastructure. Execution on this diversification strategy, more than quarterly smartphone performance, will define what comes next for the company.
