Qualcomm Inc. (QCOM) First Take In line quarter with weak margin guidance, driven by smartphone downside

Equity Research 29 July 2026 | 4:18PM EDT

Qualcomm Inc. (QCOM): First Take: In-line quarter with weak margin guidance, driven by smartphone downside

Key stock takeaways: We expect the stock to trade lower following an in-line James Schneider, Ph.D. | quarter and weaker guidance driven by persistent headwinds to handset revenue. Goldman Sachs & Co. LLC Handset revenue was guided to decline QoQ in FY4Q due to elevated memory Anmol Makkar pricing. Non-handset revenues are expected to accelerate from 24% in FY26 to | greater than 60% in FY27. On the conference call, we expect investors to focus on: Goldman Sachs & Co. LLC

(1) potential timeline for easing of memory constraints and smartphone market Luya You | recovery; (2) shape of datacenter revenue ramp in FY27; (3) progress on Goldman Sachs & Co. LLC diversification strategy. Khalil Fenina | Quarterly results were roughly in line with the Street: Qualcomm reported Goldman Sachs & Co. LLC revenue of $9.95 bn, above GS at $9.6 bn and the Street at $9.7 bn. Gross margin of 54.0% was below GS at 55.4% and the Street at 55.2%. EBT margin of 27.1% was below GS at 28.4% and the Street at 28.1%. Operating EPS of $2.21 was just above GS at $2.20 but below the Street at $2.23. QCT revenue of $8.50 bn was above GS at $8.22 bn and the Street at $8.26 bn. Within QCT, Handsets revenue of $5.1 bn was above GS at $4.9 bn and the Street at $5.0 bn. Automotive revenue of $1.6 bn was above GS and the Street at $1.5 bn. IoT revenue of $1.83 bn was in line with GS and the Street at $1.8 bn.

FY4Q revenue guidance is in line, with EPS below the Street. Qualcomm guided FY4Q revenue in line and EPS below the Street. Revenue was guided to $10.1 bn, which is modestly above GS and the Street at $10.0 bn. EPS (excl. SBC) was guided to $2.15, which is below GS at $2.38 and the Street at $2.35.

Price target and risks: We are Neutral rated on QCOM. Our 12-month target price of $180 reflects a 15X P/E multiple applied to our normalized EPS estimate of $12.00. Key upside risks include: (1) Stronger-than-expected traction for Qualcomm’s Datacenter CPUs; (2) Stabilizing market share / share gains in smartphones; (3) Stronger-than-anticipated traction for ARM-based PCs. Key downside risks include: (1) Greater-than-expected share loss in the smartphone business; (2) Slower-than-expected automotive and IoT revenue ramp.

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Goldman Sachs Qualcomm Inc. (QCOM)

Exhibit 1: QCOM - Variance summary

FY3Q26 Financials ($ mn, except EPS) Actual GS Street Actual/GS Actual/Street QCT 8,504 8,216 8,256 3.5% 3.0% Handsets 5,086 4,932 4,962 3.1% 2.5% Automotive 1,588 1,472 1,482 7.9% 7.2% IoT 1,830 1,812 1,834 1.0% -0.2% QTL / Other 1,443 1,389 1,406 3.9% 2.6% Total Revenue 9,947 9,605 9,662 3.6% 3.0% QoQ -6.2% -9.4% -8.8% YoY -4.0% -7.3% -6.8% Gross Margin (excl. SBC) 54.0% 55.4% 55.2% -146 bps -123 bps Non-GAAP EBT 2,693 2,729 2,716 -1.3% -0.8% EBT Margin (%) 27.1% 28.4% 28.1% -134 bps -104 bps EPS (excl. SBC) $2.21 $2.20 2.23 0.6% -1.1%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

Exhibit 2: QCOM - Guidance FY4Q26E Financials ($ mn, except EPS) Guidance GS Street Guidance/GS Guidance/Street QCT 8,200 8,515 8,529 -3.7% -3.9% QTL 1,250 1,351 1,285 -7.5% -2.7% Total Revenue 10,100 10,007 10,003 0.9% 1.0% QoQ -4.7% 4.2% 3.5% YoY -10.4% -11.2% -11.2% EPS (excl. SBC) $2.15 $2.38 $2.35 -9.7% -8.7%

Source: Company data, Goldman Sachs Global Investment Research

QCOM 12m Price Target: $180.00 Price: $162.88 Upside: 10.5%

Neutral GS Forecast 9/25 9/26E 9/27E 9/28E Market cap: $174.6bn Revenue ($ mn) 44,140.0 42,462.6 47,204.0 52,035.2 Enterprise value: $185.7bn EBITDA ($ mn)…