QCOM 2Q26 First Take: Results remained muted. Revenue met Street expectations but continued to decline. GPM kept slipping, pressured by higher memory prices and soft demand, which pushed up costs.

Guidance for next quarter calls for revenue of $9.7–10.5bn, with no clear sign of recovery. Non-GAAP EPS is guided to $2.05–2.25, below the Street at $2.36. Demand in handsets and other end-markets stays weak, while memory inflation continues to weigh on costs.

With the core franchise sluggish, the company is pushing for a breakthrough in data centers. It plans to build across four tracks: custom silicon, commercial CPUs, AI accelerators, and connectivity products. This narrative once lifted the stock above $250.

As concerns over the durability of AI capex mounted, the stock was dragged down by the sector-wide selloff. Shares have fallen back below $160, effectively giving back the data center-driven rally.

Against a fragile AI backdrop, the data center business has yet to contribute meaningful revenue and should be viewed as an upside option. The legacy businesses still face headwinds from memory price increases. If the memory cycle turns down, that pressure should gradually ease.

Today, legacy products such as smartphones remain in decline, which continues to pressure the company. When memory pressure abates and downstream demand firms, earnings and valuation should find a floor and turn up. For more, follow Dolphin Research for subsequent takes and transcripts. $Qualcomm(QCOM.US)