Qualcomm projected adjusted earnings per share between $2.05 and $2.25 for the quarter ending September 2026, falling short of analyst estimates averaging about $2.36 [1, 2, 3]. Revenue is expected between $9.7 billion and $10.5 billion, near or slightly below consensus forecasts [1, 3].

Handset revenue declined 20% year-over-year in fiscal 2026, marking the lowest level since 2021, due in part to memory chip shortages driven by AI infrastructure demand that constrained phone production and chipset sales [1, 4]. Qualcomm is losing modem share faster than anticipated for the upcoming iPhone launch, with Apple shifting more toward in-house silicon [1, 2, 4, 3].

To manage rising costs, Qualcomm CEO Cristiano Amon said prices on all processors will rise by double-digit percentages starting September 1 [2, 4]. Bernstein analysts noted that cost increases and higher spending are significantly pressuring margins but expect growth in the data-center business to more than offset pricing headwinds [2].

Some handset makers have responded by using prior-generation Qualcomm chips amid rising component costs [4]. Qualcomm forecast Android phone revenue will drop about 20% in fiscal 2026, cutting over $1.50 per share from earnings [1, 3]. However, Chinese phone makers’ handset revenue appears to have hit bottom in the third quarter and is expected to return to double-digit sequential growth in the fourth quarter [3].

To reduce dependence on smartphone chip revenue, Qualcomm plans to expand its data center and automotive chip businesses. It aims for phones to comprise only one-third of revenue by 2029. Non-handset revenue is projected to grow more than 60% in fiscal 2027, up from 24% growth in fiscal 2026 [1, 2, 4]. The company recently announced a decade-long chip supply deal with BMW focused on automotive applications [4].

Qualcomm shares fell roughly 4-5% following the profit forecast and warnings about rising costs and Apple-related revenue declines on July 30 [1, 2]. The price increases on processors will take effect September 1 to offset higher memory and production expenses [2, 4].