TLDR
- Qualcomm dives after hours as profit weakness eclipses record quarterly revenue.
- Strong auto and IoT growth fail to offset Qualcomm’s margin-driven profit drop.
- Qualcomm’s earnings slip sparks a sharp after-hours slide despite solid sales.
- Markets punish Qualcomm after profit declines overshadow segment-level gains.
- Revenue hits records, but Qualcomm sinks as investors focus on shrinking profit.
Qualcomm (QMM) shares closed higher at $148.89 yet dropped to $135.39 after hours as weak profit overshadowed steady segment gains. The sharp reversal followed the release of first-quarter fiscal 2026 results which showed mixed performance across core markets. The report highlighted record revenue but also revealed profit pressure that outweighed strength in automotive and IoT businesses.
QCOM Profit Declines Despite Revenue Growth
Qualcomm posted $12.3 billion in revenue for the quarter and marked a 5% rise from the prior year. The company reported GAAP earnings of $2.78 per share which edged lower from last year’s level. Net income also fell to $3.0 billion and signaled reduced profitability under current operating conditions.
The firm attributed part of the decline to margin pressure and broader memory supply constraints affecting handset demand. These conditions limited near-term smartphone prospects and created headwinds for the high-volume QCT segment. Revenue gains suggested stable demand across other technology categories and balanced some of the weakness.
Management noted consistent interest in premium devices and continued adoption of advanced mobile platforms. The quarterly performance showed mixed trends across the portfolio and reflected shifting conditions in global hardware markets. The earnings pattern reinforced concerns that profit growth remains uneven across business lines.
Automotive and IoT Deliver Strong Gains
Qualcomm reported QCT revenue of $10.6 billion and registered a 5% increase from last year’s quarter. The automotive segment expanded 15% with $1.1 billion in revenue for the second straight quarter. IoT activity grew 9% and supported wider diversification across industrial and consumer ecosystems.
The automotive unit continued benefiting from demand for connectivity systems and advanced compute platforms in modern vehicles. This unit extended its multi-year momentum and signaled persistent structural growth for Qualcomm in the mobility sector. IoT also gained traction as connected devices advanced across enterprise and home markets.
These segments strengthened Qualcomm’s long-term positioning although they did not offset the handset-related pressure. Broader market transitions elevated demand for specialized compute solutions and encouraged deeper integration across chip platforms. The results indicated steady progress in strategic areas despite short-term earnings erosion.
Corporate Actions and Market Reaction
Qualcomm completed its Alphawave Semi acquisition which expanded its data center presence and enhanced compute capabilities. The company returned $3.6 billion to shareholders through dividends and buybacks during the quarter. This activity included $949 million in dividends and $2.6 billion used to repurchase 15 million shares.
These actions underscored continued capital deployment even as profit trends softened across key operations. The after-hours decline reflected concern that falling earnings overshadowed record revenue and diversification gains. Market reaction remained focused on compressed profitability as supply conditions constrained handset momentum.
Qualcomm aims to maintain growth across automotive, IoT and compute markets while navigating industry supply imbalances. The quarter highlighted strong pockets of expansion but also signaled the need for improved margin stability. The updated financial picture reinforced shifting expectations around Qualcomm’s near-term performance trajectory.
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