Qualcomm stock slips as handset weakness clouds strong auto growth

Qualcomm reported fiscal fourth-quarter results after the market close on Wednesday, November 4, with non-GAAP revenue of 10.4 billion US dollars and non-GAAP earnings of 2.17 US dollars per share. The figures came at the high end of management's guidance, but the outlook still leaves investors weighing smartphone weakness against faster expansion in automotive and data center products.

Qualcomm stock traded at 133.34 euros on Lang & Schwarz at 17:02 CET on Thursday, November 5, 8.74 percent below the Xetra close of Wednesday, November 4. The quote was 2.77 percent below the 137.13 euros cited in the latest report on the same day at 14:43 CET, a separate intraday comparison.

Handsets remain the central risk

According to MarketBeat, handset revenue was 5.1 billion US dollars in the quarter, reflecting industry-wide memory pressure. Qualcomm expects handset revenue to decline by a mid-single-digit percentage sequentially in fiscal Q1 as Android growth is offset by the continued decline in Apple product revenue.

The company guided fiscal Q1 revenue to 10.4-11.2 billion US dollars and non-GAAP earnings to 2.15-2.35 US dollars per share. Its QCT segment is expected to generate 9.0-9.6 billion US dollars, with data center activity included in the outlook.

Automotive expands the growth base

Automotive revenue reached 2.0 billion US dollars, up 89 percent year over year, while IoT revenue rose 4 percent to 1.9 billion US dollars. Qualcomm said combined automotive, IoT and data center revenue should grow more than 60 percent year over year in fiscal 2027, with non-handset businesses accounting for more than half of QCT revenue.

Management also reiterated a 5 billion US dollar data center revenue target for fiscal 2027 and expects more than 650 million US dollars in the December quarter. The Qualcomm investor-relations site lists fiscal fourth-quarter GAAP revenue of 10.3 billion US dollars, non-GAAP revenue of 10.4 billion US dollars, GAAP earnings of 1.17 US dollars per share and non-GAAP earnings of 2.17 US dollars per share.

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