Does QUALCOMM’s (QCOM) AI Shift and Surging EPS Hint at a New Core Business Model?

• In the second quarter of fiscal 2026, QUALCOMM reported revenue of US$10,599 million, slightly lower than a year earlier, while net income more than doubled to US$7,370 million, with basic earnings per share from continuing operations rising to US$6.92.
• Beyond stronger profitability, QUALCOMM’s recent results highlight a sharpening focus on AI-enabled products, data center custom silicon, automotive chips and large buybacks, signalling a business mix that is gradually shifting away from its traditional handset core.
• We’ll now examine how QUALCOMM’s push into AI-native smartphone and data center chips may reshape its existing investment narrative.

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QUALCOMM Investment Narrative Recap

To own QUALCOMM today, you need to believe its shift from handset-heavy revenues toward AI-centric chips, automotive and data center silicon can more than offset pressure in smartphones and regulatory and geopolitical risks. The latest quarter’s profit jump and US$20 billion buyback support near term sentiment, but the key short term catalyst remains execution in AI data center and AI-native devices, while the biggest risk is that these diversification bets fail to scale commercially as hoped.

In that context, the confirmation that QUALCOMM plans to begin shipping custom data center chips to a major hyperscaler this year looks especially important, because it directly ties recent AI enthusiasm and the Alphawave acquisition to a concrete customer ramp. It connects the current earnings strength to one of the main potential growth drivers analysts are watching, even as handset revenue softness and supply constraints remind us how dependent the business still is on cyclical smartphone demand.

Yet beneath the optimism around AI and buybacks, investors should be aware of how quickly competition and customer insourcing could reshape QUALCOMM’s core revenue base...

Read the full narrative on QUALCOMM (it's free!)

QUALCOMM's narrative projects $48.8 billion revenue and $11.0 billion earnings by 2029. This requires 3.1% yearly revenue growth and about a $1.1 billion earnings increase from $9.9 billion today.

Uncover how QUALCOMM's forecasts yield a $168.50 fair value, a 17% downside to its current price.

Exploring Other Perspectives

Some of the most optimistic analysts already expected QUALCOMM to reach about US$49.7 billion in revenue and US$14.3 billion in earnings by 2029, and, unlike the consensus, they lean heavily on faster growth in automotive and IoT to justify that view. If you are comparing those assumptions with today’s AI data center headlines, it is worth asking whether this new momentum strengthens that bullish scenario or exposes how much still needs to go right.

Explore 22 other fair value estimates on QUALCOMM - why the stock might be worth 33% less than the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your QUALCOMM research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free QUALCOMM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate QUALCOMM's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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