TLDR
- Qualcomm reported Q4 earnings of $3.00 per share versus $2.88 expected, with revenue of $11.27 billion beating forecasts of $10.79 billion.
- First-quarter revenue guidance of $11.8 billion to $12.6 billion exceeded analyst expectations of $11.62 billion.
- New AI200 and AI250 accelerator chips will launch in 2026 and 2027 to compete in the data center market against Nvidia and AMD.
- Handset division revenue increased 14% to $6.96 billion while automotive sales rose 17% to $1.05 billion in the quarter.
- Stock has gained 17% year-to-date, lagging the Nasdaq’s 22% rise and trailing Nvidia’s 45% and AMD’s 112% gains.
Qualcomm delivered fourth-quarter results that sailed past analyst projections. The company earned $3.00 per share on an adjusted basis, topping the $2.88 consensus estimate.
Revenue reached $11.27 billion compared to expectations of $10.79 billion. That represented 10% growth from the $10.24 billion reported in the year-ago period.
A tax expense created a net loss of $3.12 billion for the quarter. The prior year saw net income of $2.92 billion, but the operational business remained strong.
Future Outlook Exceeds Expectations
The first-quarter guidance caught Wall Street’s attention. Qualcomm expects revenue ranging from $11.8 billion to $12.6 billion.
At the midpoint of $12.2 billion, this forecast beats the $11.62 billion analyst estimate. Earnings per share should come in between $3.30 and $3.50 on an adjusted basis.
Analysts had projected $3.31 per share. The optimistic outlook reflects strength across multiple business segments.
The handset division generated $6.96 billion in revenue, up 14% from last year. Holiday timing and product launches in China drove much of this growth.
Automotive sales climbed 17% to $1.05 billion. The Internet of Things segment, including Meta’s virtual reality products, posted $1.81 billion in revenue.
That marked a 7% increase year-over-year. The licensing business dipped 7% to $1.41 billion but still exceeded projections.
Data Center Chips Enter the Race
Qualcomm unveiled plans for AI accelerator chips last week. The AI200 will ship in 2026, followed by the AI250 in 2027.
Both products support full rack configurations with liquid cooling systems. This design matches what Nvidia and AMD currently offer for data centers.
These systems allow up to 72 chips to function as a single computing unit. AI companies need this capability to train advanced language models.
The announcement drove Qualcomm shares up 11% in the following session. The move signals a serious push into Nvidia’s dominant territory.
Analyst Views and Market Performance
BofA Securities increased its price target from $200 to $215 while maintaining a Buy rating. The firm cited handset momentum in China and progress in diversification efforts.
However, analysts identified several risk factors. About 68% of handset revenue comes from Chinese manufacturers, creating concentration concerns.
Xiaomi appears to be developing its own chip technology. Samsung’s share of Qualcomm chips will decline from 100% to 75% in the second quarter.
Apple’s modem contract ends in approximately one year. The smartphone semiconductor market shows limited overall growth potential.
Qualcomm shares have risen 17% this year through Wednesday’s close. The Nasdaq index gained 22% over the same period.
Nvidia stock jumped 45% while AMD surged 112% in 2025. BofA expects Qualcomm’s valuation to improve as IoT, automotive, and data center revenues expand.
The firm sees handset concentration as the primary near-term challenge. All three main business segments exceeded analyst estimates for the quarter.
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