Qualcomm Faces Crucial Test After Brutal 35% Slide

The 41-year-old company has given back the stock gain it made in the first half of the year and is sitting 35% below its peak. And it’s heading into an earnings report that needs to answer some hard questions.

Qualcomm (QCOM) closed July 27 at $170.04, up 1.84% on the session but a long way from the $259.92 all-time high reached May 29, according to Yahoo Finance. It was still trading lower on the morning of July 28.

The stock is up just 0.42% year to date, despite a spectacular Investor Day reveal in June, in which the company nearly doubled its 2029 non-handset revenue target to $40 billion.

Q3 fiscal 2026 earnings arrive July 29 after market close. The setup is uncomfortable. But it may also be the most interesting Qualcomm print in years.

What Wall Street expects for Qualcomm on July 29

The Zacks consensus estimate calls for $9.71 billion in revenue and $2.22 in adjusted EPS, according to Zacks data. Qualcomm‘s own Q3 guidance, issued with Q2 results in April, projected total revenues of $9.2 billion to $10.0 billion and non-GAAP EPS of $2.10 to $2.30.

Qualcomm has beaten estimates in each of the past four quarters, delivering an average earnings surprise of 3.28%, according to Zacks. In the most recently reported quarter, the company beat by 3.11%. 

A beat is expected again this quarter. The stock’s reaction will depend entirely on what management says about the path forward, particularly the data center revenue ramp and whether Investor Day targets hold up under questioning.

Full-year fiscal 2026 EPS estimates have risen 0.4% to $10.78 over the past 60 days, and fiscal 2027 estimates are up 1.7% to $10.88, Zacks confirmed. The market is pricing in not deterioration, but the uncertainty about timing.

2 stories inside Qualcomm: one strong, one challenged

The Q2 fiscal 2026 results, reported April 29, showed both dimensions of the Qualcomm story simultaneously, according to the company’s earnings release.

• Combined QCT Automotive and IoT revenues grew 20% year over year, featuring record quarterly automotive revenues. 

• QCOM returned $3.7 billion to shareholders, including $2.8 billion in share repurchases and $945 million in dividends. 

• The company announced a new $20 billion stock repurchase authorization. 

• The quarterly dividend was raised from $0.89 to $0.92 per share, Qualcomm Investor Relations reported.

Those are the strong numbers, absolutely. The challenging ones live in the handset segment, however. Management guided handset revenues from Chinese customers to bottom in Q3, assuming weaker low-tier handset units sequentially. 

Increased pricing pressure from rival chipmakers in the Android market, memory supply constraints that are affecting device economics, and elevated operating expenses from ongoing AI and data center investments are all weighing on the near-term outlook. 

Qualcomm June Investor Day targets that the market has not rewarded yet

This is the disconnect worth understanding. On June 24, Qualcomm revealed one of the most ambitious strategic pivots in the semiconductor industry. 

Qualcomm nearly doubled its fiscal 2029 non-handset revenue target to $40 billion from $22 billion. I know you might also be asking the same question: Will it be able to meet the goal? 

By fiscal 2027, handsets are expected to account for less than half of total revenue. By 2029, smartphones will account for roughly one-third of the business.

The data center timeline is specific. In fiscal 2026, immediate revenue comes from connectivity solutions. In fiscal 2027, two hyperscaler custom-silicon customers each generate more than $1 billion in revenue, according to the Investor Day report. 

Mid-2027 brings the AI250 accelerator with High Bandwidth Compute architecture. Mid-2028 brings the Oryon server CPU and next-generation AI accelerators with co-packaged optics, noted the same report.

The stock has not rewarded any of this. QCOM has underperformed the semiconductor industry by a wide margin over the past year, returning 9.61% against the industry’s 39% gain, according to Yahoo Finance.

Intel (INTC) surged 308% in the same period, as of this reporting, while Broadcom (AVGO) returned 28%.

My read of that underperformance:

1. Investors are waiting for proof.

2. The broader semiconductor industry is pulling back. 

The data center revenue targets are three to four years away. The handset business is under pressure today. The gap between the story Qualcomm told in June and the business it will report in July is where investor patience is being tested.

Here is what a Qualcomm beat could unlock

A company with a $20 billion buyback, a consistent dividend, a track record of quarterly beats, and a credible multi-year diversification plan is priced for pessimism.

If July 29 delivers revenue at the high end of guidance, commentary confirming two hyperscaler customers remain on track for billion-dollar engagements in 2027, and any positive language on the handset bottom, the setup for multiple re-ratings is intact. 

The stock at $170 with $40 billion in non-handset revenue targeted for 2029 is a very different risk-reward proposition than the same story could represent at $259.

So, the July 29 print will not resolve the full multi-year thesis. But it can either confirm that the handset is stabilizing and the data center ramp is real, or deepen the skepticism that has driven the 35% decline from peak.

That binary is what makes Qualcomm one of the more consequential earnings reports in the semiconductor space this week.