Qualcomm beats revenue estimates as automotive sales surge 61%

Qualcomm reported fiscal third-quarter revenue of $9.95 billion, beating the $9.67 billion consensus, as a 61% surge in automotive chip sales helped offset a 20% decline in its handset business.

"Memory prices are going up, and AI is sucking up a lot of the supply, leaving little for smartphone players," Bernstein analyst Stacy Rasgon said.

Non-GAAP earnings per share came in at $2.21, missing the $2.22 consensus estimate — the company's first earnings miss in six quarters. The QCT segment, which includes handsets, automotive and IoT, generated $8.2 billion in revenue, down 8% from a year earlier. Automotive revenue hit a record at roughly $1.4 billion, while handset revenue fell to about $4.9 billion. The QTL licensing segment contributed $1.75 billion with EBT margins near 72%.

The results mark a critical inflection point for Qualcomm as it navigates a memory-driven handset downturn while accelerating its diversification into data center and automotive markets. CEO Cristiano Amon has set a target of $40 billion in non-handset revenue by fiscal 2029, anchored by the Alphawave Semi acquisition and hyperscaler custom silicon shipments slated for late calendar 2026. Shares of Qualcomm have declined 14% over the past month and trade at a forward price-to-earnings ratio near 15, reflecting persistent concerns about handset cyclicality and customer concentration. Investors will watch the earnings call for updated guidance on the Q4 recovery trajectory and data center milestones.

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