Qualcomm (QCOM) reported its Q2 earnings on Wednesday, exceeding Wall Street’s expectations with revenues of $10.59 billion and earnings per share (EPS) of $2.65—up from $2.55 anticipated by analysts. In the same quarter last year, Qualcomm posted $10.83 billion in revenue and an EPS of $2.85.
Despite this strong performance, Qualcomm’s guidance for Q3 revenue fell short of analysts’ forecasts. The company expects revenue to range from $9.2 billion to $10 billion, while analysts were projecting $10.23 billion.
A glimmer of hope emerged in Qualcomm’s outlook for the Chinese smartphone market, with executives suggesting that the market may be reaching its low point this current quarter. Additionally, Qualcomm plans to ship custom silicon to an undisclosed hyperscaler later this year, which could bolster its business moving forward. Following the earnings announcement, Qualcomm’s stock surged by over 13%.
Revenue from Qualcomm’s QCT (Qualcomm CDMA Technologies) segment hit $9.07 billion, slightly below the expected $9.13 billion. In contrast, revenue from the licensing segment was $1.38 billion, surpassing the anticipated $1.32 billion.
In the broader context, the International Data Corporation noted a year-on-year decline in global smartphone shipments, dropping 4.1% to 289.7 million units in Q1, marking the end of a growth streak of ten consecutive quarters. Market research indicates that the decline in shipments could continue throughout 2026, with estimates suggesting a potential double-digit decrease in unit sales for the year.
Qualcomm’s revenue is predominantly derived from its handset business, which remains the company’s core focus. While Qualcomm is striving to diversify into data centre chip sales and expand its automotive and robotics technologies, analysts are sceptical about whether these initiatives will adequately compensate for decreased smartphone shipments.
A potential highlight for Qualcomm could occur in June when CEO Cristiano Amon speaks at the annual Computex conference in Taiwan. His keynote, titled “AI Together,” may provide insights into Qualcomm’s data centre strategy and its plans to boost market share in this sector.
In summary, while Qualcomm’s latest earnings report demonstrates the company’s resilience in a challenging market, its Q3 outlook and the broader smartphone market trends present a mixed picture. Investors and analysts will be keenly watching how Qualcomm navigates these dynamics in the coming months.
