Key Stats for Qualcomm Stock
- Current Price: $165.79
- Target Price (Mid): ~$415
- Street Target: ~$193
- Potential Total Return: ~150%
- Annualized IRR: ~25% / year
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What Happened?
Qualcomm (QCOM) closed at $165.79, roughly 36% below its $259.92 52-week high and down about 3% in 2026. The stock has spent the year absorbing one downgrade after another, and its 2026 peak-to-trough drawdown reached 41.2% on July 31, just after the company reported. What the market is actually afraid of is narrower than the headline decline suggests, and it shows up in one line of the income statement: gross margin.
For the first time in years, Qualcomm told investors its chip-segment gross margins would run below their historical range. That single admission, buried inside a quarter where revenue still beat guidance, is what the sell-off is really pricing. The question worth answering is whether the dip is the temporary pass-through management claims, or the first crack in a business that the market has always paid up for because it earned nearly 50 cents of gross profit on every chip dollar.
The Squeeze Is Real, and Management Named a Number
In fiscal Q3 2026, reported July 29, Qualcomm delivered $9.9 billion in revenue at the high end of its guide, with non-GAAP EPS of $2.21. The chip business, QCT, posted an EBT margin of 26%, in line with guidance but softer than investors are used to. The culprit is memory. A global DRAM and NAND shortage has driven up the bill of materials across the industry, and Qualcomm is caught between rising input costs and consumer markets that cannot easily absorb higher phone prices.
CEO Cristiano Amon was direct about the mechanism. “Even a double-digit price increase, which is just a pass-through of the input cost increase and wafer price increases, it’s actually small when you compare it to the order of magnitude of the memory bill of materials,” he said. That framing defines the fix. Qualcomm is raising prices by a double-digit percentage across end markets, and CFO Akash Palkhiwala said the benefit shows up in gross margin over the next couple of quarters as existing contracts and product cycles roll off. He was specific about the target: the baseline chip business has run a 48% to 50% gross margin, and management expects to return to that range once the price increases take hold. That baseline sits above the 26% EBT figure because one measures gross profit and the other measures earnings after operating costs.
Data center revenue starts flowing in the December quarter from two custom-silicon wins, and Palkhiwala said that early revenue carries a gross margin well below baseline, dragging the QCT weighted average by 1.5% to 2%. So investors face two opposing forces on the same line: pricing actions lifting margins back up, and a data center ramp pulling them down. The net path is the real debate, not the existence of the dip.
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The Bridge Qualcomm Has to Cross
Qualcomm now expects its share of the upcoming iPhone to land materially below its prior 20% estimate, and Palkhiwala guided Apple product revenue to fall roughly 50% from the September to December quarter, pulling forward an exit everyone knew was coming.
Palkhiwala said non-handset revenue growth accelerates from 24% in fiscal 2026 to more than 60% in fiscal 2027, and that the increase “will replace the entire Apple product revenue within the year.” Automotive is the proof point already on the board: QCT automotive hit a record $1.6 billion in Q3, up 61% year over year, and a newly signed BMW agreement names Qualcomm the lead compute silicon provider for next-generation ADAS and digital cockpit. Total non-handset QCT revenue grew 28% year over year, and management expects non-handset to cross 50% of QCT revenue in fiscal 2027.
A Discount That Holds Only If the Margins Recover
On valuation, the gap between Qualcomm and its peers is stark. QCOM trades at 17.88x NTM P/E and 12.84x NTM EV/EBITDA, per TIKR. NVIDIA trades near 22.6x forward earnings, Broadcom near 24.9x, and Texas Instruments near 28.9x. Qualcomm carries the cheapest forward multiple among its large-cap chip peers by a wide margin.
It is the market pricing execution risk on a bridge that has not been crossed yet. Data center revenue is essentially zero today, targeted to reach $5 billion in fiscal 2027 and $15 billion in fiscal 2029, and the first server-class CPU does not reach production until 2028. The Apple roll-off is certain; the non-handset replacement is a forecast. If the pricing actions restore margins and automotive and data center scale on schedule, today’s multiple looks like a mistake. If memory costs linger or the ramp slips, the stock is cheap against a handset earnings base that keeps shrinking. That is the wager, and the discount is the market refusing to pay for a story until the silicon ships.
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TIKR Advanced Model Analysis
- Current Price: $165.79
- Target Price (Mid): ~$415
- Potential Total Return: ~150%
- Annualized IRR: ~25% / year
See analysts’ growth forecasts and price targets for Qualcomm stock (It’s free!) >>>
Two revenue drivers carry the case: automotive compute scaling on multi-generation platform wins like BMW, and the data center ramp toward the $15 billion fiscal 2029 target. The margin driver is the pricing pass-through restoring QCT to its 48% to 50% gross-margin baseline once memory costs are recovered through higher ASPs. The primary risk is that same line in reverse: if the double-digit increases fail to stick, or data center dilution outweighs the recovery, the margin normalization the model assumes never arrives.
The upside case is that non-handset growth replaces Apple, margins normalize, and the multiple re-rates toward peers. The downside case is that memory pressure persists into fiscal 2027 while the data center business burns margin before it earns scale, leaving a handset-dependent earnings base trading at a deserved discount.
Conclusion
The number to watch is QCT gross margin on the November 4 fiscal Q4 report. Management promised the pricing actions would begin lifting margins within a couple of quarters, and the December-quarter guide is the first place that claim meets reality. Good looks like QCT gross margin holding steady or ticking up despite the incoming data center dilution, a sign the price increases are sticking faster than the drag builds. Bad looks like margins sliding further while Apple revenue falls off as guided. The stock is cheap for a reason the company says is temporary. The next print is when investors find out if that word holds.
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Should You Invest in Qualcomm?
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Pull up Qualcomm, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
