Qualcomm Seeks Growth Beyond Handsets Amid Apple Revenue Loss
Qualcomm's (QCOM) share of Apple's recent iPhone launch will be lower than expected, but the company remains optimistic about its future growth prospects.
In a recent earnings call, Qualcomm management raised its non-handset revenue target for fiscal 2029 to $40 billion, nearly doubling its previous goal of $22 billion. This increase is attributed to growing demand in the automotive, IoT, and data center segments.
However, the company's handset business has been struggling, with QCT Android revenue down 20% year-over-year. Management expects the handset market to decline by low teens in 2026 compared to 2025.
To offset these losses, Qualcomm is counting on its non-handset revenue growth, which is expected to accelerate from 24% in fiscal 2026 to over 60% in fiscal 2027. This growth is driven by signed agreements with major players like BMW and Amazon, as well as custom chip engagements with hyperscalers.
The company's stock price has fallen 24% below its 52-week high but remains attractive at a multiple of 19.0 times earnings, lower than the S&P 500's multiple of 22.5. With an operating margin of 23%, Qualcomm is trading at a premium to the industry average.
The next key test for Qualcomm will be its fiscal Q4 report, which is expected in December. Management has guided revenue between $9.7 billion and $10.5 billion, with QCT handset revenues forecast to grow around 2% year-over-year.