Qualcomm Stock Faces 24% Handset Revenue Drop Ahead of Q4

Qualcomm stock investors are awaiting the company's fiscal fourth-quarter results after Wednesday's market close, with attention focused on falling handset-chip sales and whether automotive, data center and other non-smartphone businesses can offset weakness in its traditional core market.

Wall Street expects adjusted earnings of about $2.16 per share on revenue of roughly $10.12 billion, compared with $3.00 per share and $11.27 billion of revenue a year earlier. Qualcomm guided for quarterly revenue of $9.7 billion to $10.5 billion and adjusted earnings of $2.05 to $2.25 per share.

The results follow announcements including a newly announced Starlink Mobile infrastructure deal, an artificial intelligence data center collaboration with Amazon and a U.S.-built computer project with Anduril.

Handset revenue remains under pressure

Analysts expect Qualcomm's QCT semiconductor division to generate about $8.8 billion in revenue, down roughly 10% from the prior-year period. Handsets are expected to account for most of the decline.

Qualcomm previously guided for about $5.2 billion in fourth-quarter handset revenue, compared with $6.1 billion a year earlier. Management expects Android demand to improve from the previous quarter, but that recovery is being offset by falling Apple modem revenue and unusually high memory prices.

Higher dynamic random-access memory and NAND costs are pushing handset prices higher and encouraging consumers to choose cheaper premium devices or previous-generation models. Those products may use less expensive Qualcomm silicon.

FinanceFeeds reported after Qualcomm's third-quarter results that QCT margins were already under pressure from higher wafer, packaging, testing and memory-related costs. Qualcomm has raised product prices, although management said the effect would take time to pass through contracts and product cycles.

Investors will be watching whether Qualcomm can stabilize QCT margins as higher component costs meet weaker demand for premium devices and declining Apple modem sales.

Data centers and infrastructure projects

Qualcomm expects non-handset QCT revenue to grow by more than 60% in fiscal 2027, after rising about 24% in fiscal 2026. The company has forecast about $5 billion in data center revenue in fiscal 2027 and $15 billion by fiscal 2029, when total non-handset QCT revenue is expected to reach approximately $40 billion.

In September, Qualcomm added Amazon as a data center customer through a multi-generation collaboration. The companies will develop customized silicon for Amazon Web Services artificial intelligence infrastructure, including AI inference, and provide optical-connectivity technology for data center networks.

Hours before the earnings report, Qualcomm said SpaceX had selected its Dragonwing cellular infrastructure platforms for Starlink Mobile's planned U.S. terrestrial 5G network. Qualcomm will supply Dragonwing QRU100 and QDU100 platforms for Massive MIMO radio and baseband infrastructure.

SpaceX plans to begin the U.S. rollout in 2027 and expects tens of thousands of sites to be deployed under the multi-year agreement. Qualcomm has not disclosed the contract's value.

FinanceFeeds recently reported on SpaceX's plans to expand Starlink Mobile through terrestrial network access, including discussions involving Boost Mobile and additional wireless infrastructure.

Why fiscal 2027 matters

Qualcomm and Anduril unveiled BlueChip in October, beginning with a U.S.-assembled laptop powered by Snapdragon X processors. Orders are expected to begin in 2027, initially targeting government, defense and other critical industries.

Alongside automotive growth, AWS custom silicon and Starlink infrastructure, the projects give Qualcomm several revenue streams outside smartphones. Handset weakness and memory costs are affecting earnings now, while many diversification projects are only beginning to generate meaningful revenue.

Investors will seek confirmation that data center revenue can approach Qualcomm's $5 billion target, automotive growth remains strong and pricing actions can repair QCT profitability. The stock's longer-term case increasingly depends on whether Amazon, Starlink, automotive and PC programs can make smartphones less than half of QCT sales.