---
title: "QCOM: As AI hype fades, when will smartphones rebound?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/43058646.md"
description: "Qualcomm (QCOM) released FY26 Q3 results after U.S. market close, corresponding to the morning of Jul 30, 2026 Beijing time. The quarter ended Jun 2026, and key points include: 1) Core metrics.Revenue was $9.95bn (-4% YoY), beating the $9.6bn consensus. Auto grew sharply, but handsets remained a drag on the top line.GPM was 53.1% (-250bps YoY). This was below market expectations (54.6%). ..."
datetime: "2026-07-30T02:08:50.000Z"
locales:
  - [en](https://longbridge.com/en/topics/43058646.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/43058646.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/43058646.md)
author: "[Dolphin Research](https://longbridge.com/en/dolphin.md)"
---

# QCOM: As AI hype fades, when will smartphones rebound?

Qualcomm (QCOM) reported FY26 Q3 (quarter ended Jun 2026) after the U.S. market close on Jul 30 Beijing time. Key takeaways below:

**1) Core metrics**: **Revenue was $9.95bn, down 4% YoY,** beating consensus ($9.6bn). Auto grew sharply, but the top line was still weighed down by smartphones.

**GPM was 53.1%, down 250bps YoY and below consensus (54.6%).** Broader cost increases across wafers/foundry, packaging, testing, advanced packaging, memory and other materials pressured margins.

**2) Segment detail**: $Qualcomm(QCOM.US) operates QCT (semis) and QTL (technology licensing), with QCT contributing over 80% of revenue.

**Within QCT: ① Smartphones delivered $5.09bn, -19.6% YoY.** The decline reflected two drivers: **industry-wide softness, with ex-Apple smartphone shipments down 11% this quarter; and a weaker high-end mix as OEMs favored last-gen platforms to cut cost**.

**② Auto revenue was $1.59bn, +61% YoY,** driven by Snapdragon Gen-4 digital cockpit shipments. The Gen-5 Snapdragon Digital Chassis will scale in Sep, lifting content per vehicle. **③ IoT revenue was $1.83bn, +9% YoY,** supported by demand across consumer and industrial products.

**3) Opex**: **Core operating expenses rose to approx. $3.6bn,** including R&D at $2.6bn and sales expense at $980mn for the quarter.

**Reported net income was $2.0bn.** Last quarter the company released a valuation allowance on deferred tax assets (~$5.7bn). **On an operating basis, core OP was $1.63bn, -41% YoY,** pressured by margin compression and higher opex.

**4) Guidance**: **For FY26 Q4, revenue is guided to $9.7–10.5bn, in line with consensus ($9.95bn).** **Non-GAAP EPS is guided to $2.05–2.25, below consensus ($2.36).**

**Dolphin Research view: Memory headwinds cap smartphones; data center story awaits delivery**

**The print was still subdued.** Revenue met/beat expectations but remained in decline. Margins slipped again as memory price hikes and weak demand lifted costs.

Guidance implies revenue of $9.7–10.5bn next quarter with no clear rebound in sight. EPS (Non-GAAP) at $2.05–2.25 is below the $2.36 street view. **End-demand for smartphones and other devices remains soft, while rising memory prices continue to pressure costs.**

**With the core legacy base weak, the company is pushing for a breakthrough in data centers.** It plans to compete across four vectors: custom silicon, commercial CPUs, AI accelerators, and connectivity, which once helped lift the stock above $250. As concerns over AI capex persistence grew, the shares fell back below $160, giving back most of the data-center-driven gains.

The market focus beyond this quarter includes:

**1) Legacy businesses: core base under memory pressure**

Smartphones are Qualcomm’s largest business, contributing over half of revenue. A soft handset market is a clear drag on results. **Global smartphone shipments were 290mn units this quarter, -6% YoY.**

**The market splits between Apple and Android.** Apple’s shipments rose nearly 20% YoY this quarter, while Android OEMs fell 11% YoY, directly weighing on Qualcomm’s smartphone performance.

**The company guides smartphone revenue at roughly $5.2bn next quarter, down about 25% YoY.** Android’s QoQ uptick will be partly offset by lower Apple-related revenue (H2 is the traditional peak season, with seasonal recovery).

**Recent memory price hikes are easing at the margin.** With OPPO and vivo reportedly rejecting price increases, the surge in memory has sparked pushback. If the memory cycle turns down, it could alleviate pressure on the legacy base.

**2) AI: on-device and data center as potential growth drivers**

With legacy markets weak, the company is investing across AI to seek new growth.

**a) On-device AI:** Management positions on-device AI as the core of its Physical AI strategy, **spanning smartphones, PCs, autos, XR, robotics, and industrial IoT,** where it already has product footprints.

**Two key vectors: ① AI Phones could drive a replacement cycle,** with AI agents becoming the new smartphone interface. **② In AI PCs,** Qualcomm launched the Snapdragon C platform (Windows laptops), featuring Oryon CPUs, low-power AI inference, and heterogeneous compute (CPU+GPU+NPU working together to run on-device AI agents).

**b) AI data center:** Qualcomm ultimately stepped into the AI main arena, its most closely watched AI strategy.

At the Jun 24, 2026 Investor Day, management outlined four product lines for AI data centers:

**① AI accelerators (HBC): Microsoft has confirmed a multi-gen partnership.**

Differentiation centers on **LPDDR5X (vs HBM)** to enable processing-near-memory, optimized for memory-capacity-intensive AI inference workloads.

**AI200 is ramping in production, with next-gen AI250** expected to sample in 2027. The follow-on AI300 will adopt UALink and ESUN for scale-up interconnects, targeting effective bandwidth 54x AI200.

**② Commercial CPU (Dragonfly C1000): Meta has confirmed a multi-gen partnership.**

Built on Qualcomm’s Oryon CPU architecture from smartphones and PCs, extended to data centers. Positioned as an 'Agentic CPU' for CPU-heavy agent orchestration, multi-step reasoning, and tool calling.

**③ Custom silicon: two hyperscalers confirmed (each \>$1bn contribution in FY27).**

Enabled by the acquisitions of **Alphawave Semi** (SerDes, die-to-die, PCIe/CXL, HBM PHY) and **Ventana** (Veyron V2 RISC-V CPU), focused on custom AI XPU design services for hyperscalers.

**④ Connectivity: first hyperscale customer secured.**

Leveraging Alphawave IP to deliver 800G/1.6T optical modules, AOC, and AEC. The company is in production on 800G LR2 modules and 800G optics/AOC/AEC, with 1.6T optics/AOC/AEC expected in 2026–2027.

**At a current market cap of $166.1bn, Qualcomm trades at roughly 20x 2027E after-tax OP,** assuming flattish revenue (legacy only), 55% GPM and a 15% tax rate. **Historically the stock has traded in a 10x–25x PE range,** putting today near the upper mid of the band.

**AI enthusiasm once pushed the stock above $250** on its data center entry. With AI capex concerns back, the shares have dropped to around $160, largely erasing the data center upside.

**While management pegs the AI data center TAM at $1tn, the business has yet to contribute meaningfully.** On legacy fundamentals alone, a 20x PE still screens relatively rich amid soft device demand.

For data centers, **management guided to $15bn revenue by FY29, but near-term execution matters more.** Against a $5bn FY27 data center revenue target, OP could reach about $1.2bn (per OPM benchmarks). **If Qualcomm hits its FY27 target and we apply 20–40x PE (reflecting growth visibility),** data centers could add $20–45bn in equity value.

**In a fragile market, it is prudent to look for a safer floor for Qualcomm.** On legacy metrics, sub-15x PE would be more conservative. **That effectively treats the data center as an 'out-of-the-money option'.** If FY27 targets are met, the market could embed 15–35% upside optionality atop the legacy base.

Below are data visuals from Dolphin Research on Qualcomm's print:

<End\>

**Risk disclosure and disclaimer:**[**Dolphin Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

### Related Stocks

- [QCOM.US](https://longbridge.com/en/quote/QCOM.US.md)

## Comments (2)

- **新用户_q3VpYj · 2026-07-30T02:15:55.000Z**: Long or short? 🤣
  - **老牛哥** (2026-07-30T03:35:22.000Z): Empty