QCOM · QUALCOMM
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a weekly close above $180
Note written ·
Price against the kill line
4.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a weekly close above $180.00, on record since 11 November 2026; only a weekly close settles it. The shares are up 6.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A weekly close above $180, over the $179.60 close of 26 October 2026 and the 50-day moving average, which would show the shares leading again; or Qualcomm raising its $5 billion fiscal 2027 data-center target or reporting December-quarter revenue above the $11.2 billion top of its guide.
Research onlyNot in the portfolio.
The business · as of
Qualcomm designs Snapdragon chips for phones, cars, PCs and connected devices, sold mainly to handset makers, and earns patent royalties from phone makers through its licensing arm. It has begun selling custom data-center chips to cloud companies. Revenue was $10,322 million in the quarter to 27 September 2026.
What is changing, and what follows · as of
- What is changing now
- On 4 November 2026 Qualcomm reported fiscal fourth-quarter handset revenue of $5,137 million, down 26% from a year earlier, and guided its December-quarter chip margin to 20%–22% with data-center revenue above $650 million.
- What follows for the company
- Operating margin fell to 13.1% in the quarter to 27 September 2026 from 25.9% a year earlier, after $235 million of restructuring charges; inventory stood at $8,640 million, and Qualcomm sold $4.0 billion of notes under a 9 November 2026 underwriting agreement.
- What follows for its customers, suppliers and competitors
- Apple (AAPL) keeps moving to its own modems; Amazon (AMZN) is one of two hyperscale buyers of the data-center chips; Arm (ARM) awaits a ruling on a five-year royalty suspension; Nvidia (NVDA) competes for the same AI chip budgets.
What the price assumes · as of
At the 13 November 2026 close (filed inputs to 4 November 2026) the shares trade at 13.5 times earnings, 22.2 times operating profit (EV/EBIT) and 4.5 times sales, for an enterprise value of $191,974 million; that holds only if revenue stops falling from the 8.4% decline of the latest quarter and operating margin climbs back from 13.1% toward the 27.5% of the December 2025 quarter.
Key figures from the filings · Technology
Quarter to 27 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 10,322
- Revenue, change on a year (%)
- −8.4
- Gross margin (%)
- 50.7
- Operating margin (%)
- 13.1
- Free cash flow, four quarters ($M)
- 8,651
- Net cash, cash less debt ($M)
- −7,431
- Price to earnings (×)
- 13.5
- Enterprise value to sales (×)
- 4.5
All filed numbers
What QUALCOMM reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 10,322 | −8.4 | 50.7 | 13.1 |
| first filed | 9,947 | −4.0 | 53.1 | 16.3 |
| first filed | 10,599 | −3.5 | 53.8 | 21.8 |
| first filed | 12,252 | +5.0 | 54.6 | 27.5 |
| first filed | 11,271 | +10.0 | 55.3 | 25.9 |
| first filed | 10,365 | +10.3 | 55.6 | 26.6 |
| Pre-tax income ($M) | 1,173 |
| Net income ($M) four quarters: 13,627 | 1,251 |
| Diluted shares, change on a year (%) quarter to 28 June 2026, filed 29 July 2026; against the quarter to 29 June 2025 | −2.7 |
| Operating cash flow ($M) | 11,145 |
| Capital spending ($M) | 2,494 |
| Free cash flow ($M) | 8,651 |
| Cash and short-term investments ($M) | 7,681 |
| Debt ($M) non-current long-term debt plus current debt | 15,112 |
| Net cash, cash less debt ($M) | −7,431 |
| Deferred revenue ($M) −44.1% on a year | 200 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 2,671 |
| Inventory ($M) | 8,640 |
| Shareholders' equity ($M) including non-controlling interests | 30,401 |
| Market value ($M) | 184,543 |
| Enterprise value, market value plus net debt ($M) | 191,974 |
| Enterprise value to sales (×) | 4.5 |
| Enterprise value to operating income (×) | 22.2 |
| Price to earnings (×) | 13.5 |
| Price to book value (×) | 6.1 |
| Free-cash-flow yield (%) | 4.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 2.8% of shares outstanding sold short, 3.0 days of average trading to cover, −15.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $6.1M |
| 12 monthsfrom | $0 | $21.5M |
Linked companies · as of
- Competitors:
- NVDA
The thesis
Qualcomm's shares are more likely to lag the S&P 500 over the next three months than to lead it. Handset revenue fell 26% in the fiscal fourth quarter and the December-quarter chip margin is guided lower. The data-center business that could offset both is only starting. The fiscal first-quarter report, expected in early February 2027, settles it. It shows whether data-center revenue beat the $650 million guide and whether the $5 billion fiscal 2027 target still stands.
Sector-wide buying, not company results, drove the rebound after the report, and part of it reversed on 13 November 2026. The shares closed at $156.75 on 5 November 2026, down 9.5% on the day after the report, according to MarketBeat. They rose to $177.14 by 12 November 2026, a session Benzinga tied to money moving from Nvidia into rival artificial intelligence (AI) chipmakers. On 13 November 2026 they closed at $172.47, after Benzinga reported an intraday fall of 4.71% to $168.80 as analysts held neutral ratings and trimmed targets.
The filed numbers do not yet support a recovery. Revenue in the quarter to 27 September 2026 was $10,322 million, down 8.4% from a year earlier, the third straight quarterly decline, according to the company's 10-K. Operating margin fell to 13.1% from 25.9% a year earlier. The rating is Low because December-quarter guidance points to a lower chip margin, and the data-center revenue that would justify a recovery is weighted toward the later quarters of fiscal 2027.
Bullish and bearish views on QUALCOMM Incorporated
The bull case on QUALCOMM Incorporated (QCOM), in brief: the data-center schedule held. The bear case: handset revenue fell 26%.
Bull case
- The data-center schedule held. On the 4 November 2026 call, management guided December-quarter data-center revenue above $650 million from two hyperscale custom-silicon customers. It repeated its targets of $5 billion for fiscal 2027 and $15 billion for fiscal 2029.
- SpaceX chose Qualcomm for Starlink Mobile. On 4 November 2026 Qualcomm announced a multiyear deal to supply Dragonwing 5G infrastructure for SpaceX's planned US network, The Star reported, with deployments from 2027 and no value disclosed. On 11 November 2026 Benzinga reported that the Federal Communications Commission (FCC) had accepted SpaceX's application to acquire 546 Grain Management 800 MHz licenses.
- Non-handset revenue is guided to grow more than 60%. Qualcomm's 4 November 2026 release expects non-handset revenue to grow more than 60% in fiscal 2027. Automotive revenue in the fiscal fourth quarter was $1,990 million, up 89% from a year earlier.
- Licensing renewals are signed. The 4 November 2026 release lists a renewed long-term licence with Apple and agreements with Huawei and Transsion. Licensing revenue (the QTL segment) was $1,304 million at a 70% earnings-before-tax margin.
- Cash generation and refinancing are in place. Free cash flow was $8,651 million over the four quarters to 27 September 2026, according to the 10-K. A 13 November 2026 8-K reports a 9 November 2026 underwriting agreement and a 12 November 2026 officers' certificate for notes due 2028 to 2036; the prospectus supplement sized the issue at $4.0 billion with coupons from 5.000% to 5.800%.
- Some analysts raised or held high targets. Daiwa Securities raised its target to $200 from $180 on 13 November 2026. On 5 November 2026 Baird cut its target to $320 from $400 and kept an Outperform rating, Tikr reported, citing data-center chips starting to ship to Amazon and a second hyperscaler.
- Arm royalty relief remains open. On 13 October 2026 a Delaware jury found that Arm breached its licence and awarded $2. Judge Noreika has yet to rule on whether Qualcomm can suspend royalties for five years under the licence.
Bear case
- Handset revenue fell 26%. Handset revenue was $5,137 million in the fiscal fourth quarter, according to the 4 November 2026 release. Management guided it down by a mid-single-digit percentage from the previous quarter for December.
- The chip-margin guide stepped down. The chip segment (QCT) earned a 24% earnings-before-tax margin in the fiscal fourth quarter, down from 29% a year earlier. December-quarter guidance is 20% to 22%, with about 3 points of the drop attributed to data center. TechTimes reported on 6 November 2026 that the $2.25 midpoint of adjusted earnings-per-share guidance sat under the $2.27 consensus.
- Memory costs are shrinking the phone market. On 4 November 2026, CEO Cristiano Amon cited "the negative impact of memory pricing on the size of the mobile industry." Management expects the handset market to shrink by a low-teens to mid-teens percentage in 2026 and to be flat to slightly down in 2027.
- Margins have fallen four quarters running. Gross margin fell from 55.3% in the quarter to 28 September 2025 to 50.7% in the quarter to 27 September 2026, according to filed figures, and inventory stood at $8,640 million on 27 September 2026.
- Apple revenue is still running off. Management said on 4 November 2026 that Apple product revenue continues to ramp down. Baird cited Apple's shift to its own modems in its 5 November 2026 target cut, Tikr reported.
- The data-center ramp is back-loaded. Management set December-quarter data-center revenue above $650 million against $5 billion for the year and an exit rate of about $7 billion. Two hyperscalers supply most of fiscal 2027, and management called custom silicon dilutive to gross margins.
- Most target changes after the report were cuts. On 5 November 2026 Barclays cut its target to $150 from $180 (Underweight), Susquehanna to $165 from $185 (Neutral), TD Cowen to $185 from $200 (Buy) and UBS to $180 from $185 (Neutral). On 9 November 2026 Freedom Broker downgraded the shares to Hold and cut its target to $185 from $200, Benzinga reported.
Price setup
After the report the shares closed at $156.75 on 5 November 2026 and $165.41 on 6 November 2026. They rose on four straight sessions to $171.47 on 9 November 2026, $173.53 on 10 November 2026, $176.57 on 11 November 2026 and $177.14 on 12 November 2026, then closed at $172.47 on 13 November 2026. MarketBeat reported an intraday low of $148.25 on 5 November 2026, on volume of 39,910,222 shares against a 15,144,726 average.
The 13 November 2026 close sits below the 50-day moving average of $178.73 and just above the 200-day moving average of $169.17. The rebound stalled under the 50-day average and under the $179.60 close of 26 October 2026, the highest close since late October. A move back below the 200-day average would leave the shares under both averages. The shares are up 6.9% over three months but closed 33.6% below the $259.92 intraday 52-week high of 29 May 2026. The 52-week closing low is $124.07, set on 7 April 2026.
SEC Form 4 filings show small open-market sales after the report. The EVP and Chief HR Officer sold 3,200 shares at $165.42 on 9 November 2026 and the General Counsel sold 1,501 shares at $161.54 on 6 November 2026, both under Rule 10b5-1 plans. A director sold 61 shares at $166.05 on 6 November 2026.
Catalysts ahead
- ~November 2026 (est.): Judge Noreika's ruling on the five-year Arm royalty-suspension clause after the 13 October 2026 jury verdict. Decides whether the Arm case brings financial relief beyond the $2 jury award. Enforcing the clause would cut royalty costs and weaken the lag case; a ruling against it removes the litigation's largest upside.
- ~November 2026 (est.): Worldwide layoff notifications under the 20 October 2026 internal memo. Headcount and charge disclosures, after $235 million of fiscal fourth-quarter restructuring charges, show whether the cuts are a one-off cost reset or a response to weaker handset demand.
- ~4 February 2027 (est.): Fiscal first-quarter 2027 results and March-quarter guidance. Shows whether data-center revenue topped $650 million, whether the $5 billion fiscal 2027 target stands and whether the chip margin held the 20% to 22% guide.
What would change the view
A weekly close above $180, over the $179.60 close of 26 October 2026 and the 50-day moving average, which would show the shares leading again; or Qualcomm raising its $5 billion fiscal 2027 data-center target or reporting December-quarter revenue above the $11.2 billion top of its guide.
What it trades with
Qualcomm trades with AI chip stocks even though its data-center revenue is only starting. The rebound after 5 November 2026 tracked sector moves: Benzinga linked the 11 November 2026 gain in fabless chip stocks to CoreWeave's results and the 12 November 2026 gain to money moving out of Nvidia. The 13 November 2026 decline came with no company results.
Memory prices move Qualcomm the opposite way from memory sellers. Qualcomm buys DRAM and NAND, so price inflation reaches its results as weaker phone demand and margin pressure. The shares also respond to hyperscaler news through Amazon, to Arm through the royalty case, and to SpaceX's wireless plans through the Starlink Mobile deal.
Caveats
- Qualcomm's fiscal year ends in late September, and fiscal fourth-quarter results are typically reported in early November. Form 10-K for fiscal 2026 · as of
- Segment margins for the chip (QCT) and licensing (QTL) businesses are earnings-before-tax margins as the company defines them, and its earnings-per-share guidance is non-GAAP. Qualcomm fiscal fourth-quarter 2026 earnings release, SEC Exhibit 99.1 · as of
- Qualcomm names revenue concentration among a small number of customers and licensees, with a significant share in China, as a risk factor. Qualcomm fiscal fourth-quarter 2026 earnings release, SEC Exhibit 99.1 · as of
- Qualcomm buys DRAM and NAND memory as inputs and does not sell memory, so memory price inflation reaches its results as a cost and demand headwind. 4 November 2026 earnings call transcript · as of
- Many Qualcomm insider sales run under pre-arranged Rule 10b5-1 plans, so a single Form 4 often reflects a schedule rather than a discretionary decision. SEC Form 4 filings · as of
The evidence, claim by claim (7)
- Fiscal fourth-quarter 2026 revenue was $10,322 million, down 8.4% from a year earlier, with an operating margin of 13.1% against 25.9% a year earlier; handset revenue was $5,137 million, down 26%. Qualcomm Form 10-K for fiscal 2026; fiscal fourth-quarter 2026 earnings release · as of
- December-quarter guidance is revenue of $10.4 billion to $11.2 billion, chip-segment revenue of $9.0 billion to $9.6 billion and non-GAAP earnings per share of $2.15 to $2.35. Qualcomm fiscal fourth-quarter 2026 earnings release, SEC Exhibit 99.1 · as of
- Management guided December-quarter data-center revenue above $650 million and repeated the $5 billion fiscal 2027 and $15 billion fiscal 2029 data-center targets. 4 November 2026 earnings call transcript, Motley Fool · as of
- Management guided the December-quarter chip-segment earnings-before-tax margin to 20% to 22%, with about 3 points of the drop from data center, against 24% in the fiscal fourth quarter. 4 November 2026 earnings call transcript; fiscal fourth-quarter 2026 earnings release · as of
- SpaceX selected Qualcomm to supply Dragonwing 5G infrastructure for Starlink Mobile's planned US network under a multiyear deal, with deployments from 2027 and no value disclosed. Qualcomm press release; The Star, 4 November 2026 · as of
- Qualcomm entered a notes underwriting agreement on 9 November 2026 and executed an officers' certificate on 12 November 2026 for notes maturing 2028 to 2036; the prospectus supplement sized the issue at $4.0 billion at 5.000% to 5.800%. Qualcomm Form 8-K, 13 November 2026; Form 424B5 · as of
- On 5 November 2026 Barclays cut its target to $150 from $180 and Baird to $320 from $400; Freedom Broker downgraded the shares to Hold on 9 November 2026; Daiwa Securities raised its target to $200 from $180 on 13 November 2026. MarketBeat 5 November 2026; Tikr 5 November 2026; Benzinga 9 November 2026; Daiwa Securities note 13 November 2026 · as of
Sources
- QUALCOMM INC/DE - Form 8-K - FY2026 · sec.gov ·
- QUALCOMM (QCOM) Q4 2026 Earnings Call Transcript · fool.com ·
- QUALCOMM INC/DE - Form 8-K - FY2026 · sec.gov
- Why Is Qualcomm Stock Surging on Thursday? · benzinga.com
- Qualcomm (NASDAQ:QCOM) Stock Falls 9.5% After Analyst Downgrade · marketbeat.com ·
- Baird Cut Its Qualcomm Target to $320. It Still Sees 104% Upside · tikr.com ·
- Qualcomm signs major 5G infrastructure deal with SpaceX for Starlink Mobile network · thestar.com.my ·
- Qualcomm Earnings Beat Estimates, Yet Stock Falls 9% as Handset Chip Sales Drop 26% · techtimes.com ·
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