Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
Qualcomm's fiscal Q3 2026 performance was defined by a sharp decline in handset chip sales, which overshadowed strong growth in automotive and IoT. The 20% drop in handset revenues was primarily driven by OEM inventory adjustments triggered by memory supply constraints, while automotive revenues surged 61% on new vehicle launches with Snapdragon digital cockpit and ADAS products. Operating income plunged 41% as R&D and SG&A expenses climbed, though $656 million in investment gains from QSI portfolio IPOs partially protected net income. The tension lies in whether the automotive and IoT diversification can offset the accelerating loss of Apple modem business and handset softness before margins erode further.
Revenue
$9.95B
-4.03% YoY
EPS (Diluted)
$1.87
-23.05% YoY
Operating Income
$1.63B
-41.13% YoY
Source: SEC XBRL
Qualcomm (QCOM) reported Q3 FY2026 revenue of $9.95B, down 4.0% year over year. Operating margin was 16.3%, down 10.3 points from 26.6% a year earlier. QCOM's fiscal Q3 FY2026 corresponds to calendar Q2 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026This filing | 2.21 | 2.27 | Miss -2.7% |
| Mar 2026 | 2.65 | 2.61 | Beat +1.4% |
| Dec 2025 | 3.50 | 3.48 | Beat +0.6% |
| Sep 2025 | 3.00 | 2.93 | Beat +2.3% |
Adjusted (non-GAAP) EPS of $2.21 versus the $2.27 analyst consensus — a -2.7% miss for Jun 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $1.87.
Compiled by AI from 10-Q Item 2 of this filing
QCT handset revenues decreased $1.2 billion, or 20%, primarily due to lower chipset shipments as major OEMs reduced inventory in response to recent memory supply constraints and related price increases.
Source: 10-Q Item 2 MD&A
Automotive revenues jumped $604 million, or 61%, driven by higher shipments from new vehicle launches with Snapdragon digital cockpit and ADAS products, and a $381 million increase in revenue per unit from favorable mix and higher ASPs.
Source: 10-Q Item 2 MD&A
R&D and SG&A increases were partly due to higher share‑based compensation after replacing annual cash incentives for fiscal 2026‑2027 with a two‑year equity award, aimed at retaining talent and aligning with the long‑term diversification strategy.
Source: 10-Q Item 2 MD&A
Investment and other income, net, rose $656 million year‑over‑year, mainly from net gains on marketable securities related to initial public offerings of certain QSI equity investments.
Source: 10-Q Item 2 MD&A
The effective tax rate for Q3 was 19%, while the annual rate is expected to be a 40% benefit due to a $5.7 billion release of valuation allowance on federal deferred tax assets in Q2, triggered by IRS notice allowing previously capitalized R&D to reduce CAMT.
Source: 10-Q Item 2 MD&A
Compiled by AI from 10-Q Item 1A of this filing · 2 high, 3 medium, 0 low
A significant portion of revenues comes from a few customers, and major OEMs such as Apple, Samsung, and Xiaomi are developing their own integrated circuit products. Apple is expected to increasingly use its own modem in future devices, which will materially reduce QCT revenues and cash flows.
Source: 10-Q Item 1A Risk Factors
A large share of revenues is derived from Chinese OEMs, and U.S./China trade actions, tariffs, or restrictions could limit sales to or purchases from these customers. Chinese government policies encouraging semiconductor self‑sufficiency may lead customers to abandon Qualcomm products, while capital controls can delay royalty payments.
Source: 10-Q Item 1A Risk Factors
Recent memory supply constraints and higher memory prices are causing OEMs to cut handset build plans, directly reducing chip demand. Simultaneously, broad‑based wafer fabrication, packaging, and materials cost increases are raising product costs, pressuring margins and possibly leading to lost revenue if supplier capacity limits shipment fulfillment.
Source: 10-Q Item 1A Risk Factors
Growth investments outside handsets carry high risk due to long design‑in cycles, stringent regulatory and safety requirements, and intense competition. If new products fail to meet performance, quality, or ESG standards, diversification efforts may not generate expected returns, impairing growth and margins.
Source: 10-Q Item 1A Risk Factors
The acquisition of Alphawave and other strategic activities involve significant integration challenges, potential impairment charges, and capital at risk. Achieving anticipated synergies and returns from such transactions is uncertain, and failure could result in financial losses or write‑downs.
Source: 10-Q Item 1A Risk Factors
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 9.95 $B | 10.37 $B | -4.03% |
Cost of Revenue $B | 4.67 $B | 4.61 $B | +1.39% |
Operating Income $B | 1.63 $B | 2.76 $B | -41.13% |
Net Income $B | 2.00 $B | 2.67 $B | -24.91% |
EPS (Basic) $ | 1.89 $ | 2.44 $ | -22.54% |
EPS (Diluted) $ | 1.87 $ | 2.43 $ | -23.05% |
R&D Expense $B | 2.61 $B | 2.23 $B | +17.12% |
SG&A Expense $M | 976.00 $M | 771.00 $M | +26.59% |
Answers draw on this SEC filing and the data on this page
Expected release date, analyst estimates & what to watch
In Q2 FY2026, QCOM reported a significant increase in net income and EPS despite a slight decline in revenue, driven by cost management and strategic share buybacks.
QCOM delivered Q1 FY2026 revenue of $12.25B (+5.0% YoY), but net income fell 5.5% to $3.0B as surging R&D (+10.0%) and SG&A (+19.6%) costs compressed operating margin by ~300 basis points to 27.5%.
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