TLDR
- Qualcomm reports Q1 FY26 earnings on February 4, with analysts expecting EPS of $3.37-$3.39 and revenue of $12.14-$12.23 billion
- Multiple analysts downgraded price targets to $160, citing concerns about Apple’s in-house modem shift and Samsung moving some modems internally
- Global handset sales expected to decline 4% in 2026, with memory shortages and pricing pressures anticipated in the second half
- Qualcomm signed partnership agreements with Volkswagen and Hyundai Mobis for automotive technology, launched new robotics processor at CES 2026
- Handset business still dominates revenue at $27.8 billion in FY2025 versus $4 billion from automotive segment
Qualcomm faces a critical test on February 4 when it reports first-quarter fiscal 2026 earnings after market close. The stock has dropped roughly 11-12% over the past year as investors brace for challenging market conditions.
Wall Street expects earnings per share between $3.37 and $3.39, marking a slight year-over-year decline. Revenue projections range from $12.14 billion to $12.23 billion, representing approximately 4% growth.
The chipmaker’s previous guidance called for Q1 revenue between $11.8 billion and $12.6 billion. Diluted EPS guidance ranged from $2.55 to $2.75.
Several analysts slashed their price targets in recent weeks. Cantor Fitzgerald lowered its target from $185 to $160 on February 2 while maintaining a neutral rating. Mizuho cut its target from $175 to $160 on January 26.
UBS also reduced its target from $185 to $160. RBC Capital initiated coverage with a Hold rating and $180 price target.
The downgrades stem from mounting concerns about the smartphone market. Mizuho analyst Vijay Rakesh expects global handset sales to fall 4% this year. He warned of additional downside risk in the second half due to memory shortages and high pricing.
Apple and Samsung Headwinds
Qualcomm faces pressure from two major customers shifting to internal solutions. Apple continues developing its own modems for iPhones. Samsung is moving some modem production in-house.
These changes threaten Qualcomm’s core business. Handsets generated $27.8 billion in fiscal 2025 revenue. That dwarfs the $4 billion from automotive operations.
Analysts at Cantor Fitzgerald predict guidance below consensus for upcoming quarters. They cite Apple’s limited share and Samsung’s internal modem shift. China handset declines due to component shortages add to the concerns.
Over the past five years, Qualcomm’s non-Apple QCT revenue grew at a 15% compounded annual rate. The company operates primarily through its QCT semiconductor business and QTL licensing division.
New Growth Initiatives
Qualcomm isn’t standing still. The company announced several partnerships at CES 2026 targeting automotive and robotics markets.
Volkswagen Group signed a letter of intent for a long-term supply agreement. Qualcomm would become Volkswagen’s primary tech provider for its zonal Software-Defined Vehicle architecture using Snapdragon Digital Chassis solutions.
Nakul Duggal, Qualcomm’s General Manager for Automotive, Industrial and Embedded IoT, and Robotics, called Volkswagen a trusted partner. The Snapdragon Digital Chassis provides foundation for software-defined architectures and advanced driver assistance systems.
Hyundai Mobis signed an agreement to co-develop next-generation SDV and Advanced Driver Assistance Systems. The partnership combines Hyundai Mobis’ expertise in system integration with Qualcomm’s system-on-chip technology.
Qualcomm launched a next-generation robotics stack integrating hardware, software, and AI at CES. The company unveiled its Qualcomm Dragonwing IQ10 Series processor for industrial autonomous mobile robots and full-size humanoids.
Figure CEO Brett Adcock praised Qualcomm’s platform for its compute capabilities and energy efficiency. He called it a valuable building block for developing general-purpose humanoid robots.
RBC Capital analyst Srini Pajjuri noted Qualcomm’s underperformance versus the SOX semiconductor index. He cited lackluster smartphone growth and lack of a compelling data center AI narrative.
Pajjuri expects muted revenue growth over two years. He believes Apple and Samsung losses will largely offset gains in automotive, extended reality, and IoT. While positive on Qualcomm’s AI accelerator announcement, he thinks revenue contribution will take time.
Wall Street’s consensus rating stands at Moderate Buy based on 10 Buy, six Hold, and one Sell recommendations. The average price target of $191.67 suggests 25.6% upside potential from current levels, though recent analyst actions lean more cautious than this average indicates.
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