Qualcomm's earnings report for this quarter is likely to be close to expectations, with FQ4 2026 revenue projected at $10.1 billion and adjusted EPS at $2.15. The real risk lies in FY27. Due to deteriorating smartphone demand, Bernstein has lowered its FY27 revenue forecast from $44.9 billion to $42.2 billion, and EPS from $9.57 to $8.77, both significantly below market consensus.
Global smartphone shipments in Q3 2026 are projected to decline by 22% year-over-year, and by 26% excluding Apple. Android shipments are expected to decline by 11% quarter-over-quarter, similar to the previously weakening PC market. Smartphones still account for approximately 68% of Qualcomm's QCT revenue, making it difficult to reduce its reliance on the smartphone business in the short term. FY27 Apple-related revenue is expected to decrease by approximately $6 billion year-over-year, while Android revenue expectations have been lowered from flat to a high single-digit decline; approximately $5 billion in new data center revenue will only partially offset this. The data center business is unlikely to drive profit growth again until FY28-29, therefore short-term profit expectations need to be revised downwards. The target price is lowered from $165 to $155, while the Market-Perform rating is maintained. (Bernstein)
