Qualcomm Earnings: Handset Chip Sales Drop 26% as Auto Revenue Soars

Qualcomm reported lower sales and profit for its fiscal fourth quarter on November 4, 2026, as revenue from smartphone chips fell sharply. Total GAAP revenue dropped 8% to $10.32 billion, while a near doubling of automotive chip sales showed the company’s push beyond phones is gaining ground. Shares fell after hours and closed 9.49% lower the next day amid a wider chip-stock selloff.

What did Qualcomm report?

For the quarter that ended in September, Qualcomm’s GAAP revenue was $10.32 billion, down 8% from a year earlier. On a non-GAAP basis, which excludes certain items, revenue was $10.44 billion, down 7%.

Profit fell faster than sales. GAAP earnings per share were $1.17. Non-GAAP earnings per share came in at $2.17, a 28% drop from $3.00 in the same quarter last year.

The chip business, called QCT, brought in $9.015 billion, down 8%. Its pre-tax margin narrowed to 24% from 29% a year earlier, according to The Motley Fool. The licensing business, QTL, which collects royalties on Qualcomm’s wireless patents, earned $1.304 billion, down 7%.

Where did sales rise and fall?

The split inside the chip business tells the main story:

• Handsets: $5.137 billion, down 26%.
• Automotive: $1.99 billion, up 89%.
• Internet of Things (IoT): $1.888 billion, up 4%.

Phones are still Qualcomm’s largest market, so a 26% decline in handset chip revenue weighed heavily on total sales. Automotive is growing quickly but is still less than half the size of the handset business.

How did the full year look?

For fiscal 2026 as a whole, GAAP revenue was $43.12 billion, down 3%. Non-GAAP earnings per share were $10.54, down 12%, while GAAP earnings per share were $12.70.

Qualcomm returned $11.67 billion to shareholders during the year, made up of $7.82 billion in share buybacks and $3.85 billion in dividends.

What is Qualcomm’s guidance?

For the first quarter of fiscal 2027, which covers the holiday period, Qualcomm expects:

• Revenue of $10.4 billion to $11.2 billion.
• Non-GAAP EPS of $2.15 to $2.35, and GAAP EPS of $1.03 to $1.23.
• QCT revenue of $9.0 billion to $9.6 billion, including data centre products.
• QTL revenue of $1.3 billion to $1.5 billion.

Looking further ahead, management said it expects revenue from outside handsets to grow by more than 60% in fiscal 2027. It also repeated a target of $5 billion in data centre revenue for fiscal 2027.

Chief executive Cristiano Amon framed the coming year as a turning point. “Fiscal 2027 marks the start of our non-handset revenue inflection,” he said in the earnings release.

Why did the shares fall?

Investors focused on the weak handset numbers and on how much of the promised diversification is visible in the near-term outlook. The Motley Fool said the first-quarter outlook “shows little of that handoff yet,” meaning the guidance does not yet reflect a big lift from newer markets.

Qualcomm stock fell about 4% in after-hours trading on November 4. It then closed at $156.75 on November 5, down $16.44 or 9.49%, on a day when chip stocks were sold off across the board.

Why it matters

Qualcomm is one of the world’s biggest suppliers of smartphone processors and modems, so its results give a read on the health of the phone market. The steep fall in handset revenue suggests the company is facing pressure in its core business at the same time as it tries to build new ones.

The rapid growth in automotive chips and the data centre target show where Qualcomm wants its future growth to come from. Whether those markets can grow fast enough to make up for a weaker phone business is now the main question for investors.

What happens next?

The next test will come with Qualcomm’s fiscal first-quarter results early in 2027. Investors will watch whether handset revenue stabilises during the holiday season and whether data centre and automotive sales keep rising quickly enough to meet management’s targets.