QUALCOMM INC/DE (QCOM)·Q1 2026 Earnings Summary
Qualcomm Smashes Q1 Estimates, But Memory Woes Tank Stock 8%
February 4, 2026 · by Fintool AI Agent
Qualcomm delivered a record-breaking Q1 FY2026, posting $12.3 billion in revenue (+5% YoY) and Non-GAAP EPS of $3.50—both smashing Wall Street estimates by double digits . Yet the stock cratered ~8% in aftermarket trading as Q2 guidance came in materially below consensus, with management citing industry-wide memory supply constraints that are crimping handset demand .
The story of this quarter: execution was flawless, but the outlook spooked investors. Record automotive revenue ($1.1B, +15% YoY) for the second straight quarter shows diversification is working , but with handsets still representing 74% of QCT revenue, near-term memory headwinds matter.
Did Qualcomm Beat Earnings?
Decisively yes—and by historic margins:
*Values retrieved from S&P Global
This marks 8 consecutive quarters of beats—a streak that speaks to Qualcomm's execution and conservative guidance philosophy .
Ask Fintool AI AgentWhat Did Management Guide?
Here's where the pain came:
Q2 FY26 Guidance vs Street:
*Values retrieved from S&P Global
The culprit is clear: "Our guidance for the second quarter of fiscal 2026 includes the estimated impact of memory supply constraints and related pricing on demand from several handset customers" .
This is an industry-wide problem, not a Qualcomm-specific issue. But with handsets at 74% of chip revenue, QCOM takes the hit.
How Did the Stock React?
The aftermarket selloff reflects disappointment with guidance, not the quarter itself. At ~$137, QCOM trades at roughly 12x forward earnings based on FY26 consensus—cheap for a company with record automotive growth and data center optionality.
What Changed From Last Quarter?
Positives:
- Record revenue: $12.25B tops the previous record ($11.67B in Q1 FY25)
- Automotive milestone: Second consecutive quarter >$1B at $1.1B (+15% YoY)
- Alphawave acquisition closed: Data center expansion now underway
- Capital return: $3.6B returned via $949M dividends and $2.6B buybacks
Negatives:
- Memory supply constraints emerged as a new headwind
- Q2 guidance came in meaningfully below prior trajectory
- GAAP EPS down 2% YoY due to higher operating costs
Segment Performance
QCT (Chips): $10.6B Revenue (+5% YoY)
Key handset highlights:
- Samsung share: Expects ~75% share for upcoming premium-tier devices, consistent with prior expectations
- ByteDance launched the first agentic AI smartphone powered by Snapdragon 8 Elite—a milestone in AI-native smartphone transition
- 7 of 9 largest cloud companies globally now working with Qualcomm on personal AI devices
Automotive continues to be the growth engine. Key design wins announced this quarter:
- Volkswagen Group letter of intent for long-term supply agreement spanning Audi and Porsche
- Toyota RAV4 (top-selling vehicle globally) now powered by Snapdragon Cockpit Platform
- 10 new Snapdragon Elite design wins with Hyundai Mobis, Leapmotor, Li Auto, Zeekr, Great Wall Motor, NIO, and Chery
Management guided Q2 automotive revenue growth to accelerate to >35% YoY .
QTL (Licensing): $1.6B Revenue (+4% YoY)
QTL margins expanded 200bps YoY—the high-margin licensing business continues to perform.
Ask Fintool AI AgentBalance Sheet & Cash Flow
Q1 Cash Flow:
- Operating Cash Flow: $5.0B
- CapEx: $549M
- Acquisitions: $1.1B (primarily Alphawave)
Strong cash generation continues even as the company executed a major acquisition.
Strategic Initiatives
Robotics Expansion
Qualcomm formally entered advanced robotics this quarter with a full suite of technologies :
- Dragonwing IQ10 series for household, industrial, and humanoid robots
- Partnerships with Figure, KUKA Robotics, Robotec.ai, and VinMotion
- Architecture supports VLAs and VLMs for real-world perception and motion planning
"Physical AI and robotics space is experiencing rapid growth, driven by advances in edge AI and sensor fusion, and Qualcomm is one of the best-positioned companies to enable this next frontier of AI."
— Cristiano Amon, CEO
PC Platform Progress
- Launched Snapdragon X2 Plus for enterprise/commercial with 35% faster single-core vs prior gen
- 18 Snapdragon-powered PCs debuted at CES 2026 from ASUS, HP, Lenovo, Microsoft
- On track to commercialize 150 Snapdragon X-powered PCs this year
Data Center Progress
- Acquired Alphawave Semi (high-speed connectivity) and Ventana Microsystems (RISC-V CPU)
- Working with Humane as first public customer, shipping and onboarding ISV workloads
- Expects FY27 to "start showing in revenues" with "multi-billion revenue opportunity in a couple of years"
Key Risks & Concerns
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Memory supply constraints: Industry-wide problem hitting Q2 guidance hard
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Customer concentration: Dependence on "a small number of customers and licensees, and particularly from their sale of premium-tier handset devices"
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China exposure: "A significant portion of our business being concentrated in China, which is exacerbated by U.S./China trade and national security tensions"
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Vertical integration risk: Customers like Apple continue developing in-house modems
Q&A Highlights
On the Memory Constraint Impact:
"It's 100% related to memory. Actually, I'll say the microeconomic indicators have been strong. We look at the handset demand has been strong... But unfortunately, I think what we saw in Q1, as we go to Q2, is 100% sized by the availability of memory."
— Cristiano Amon, CEO
On China OEM Behavior: CFO Akash Palkhiwala noted that "several OEMs, especially in China, are taking actions to reduce their handset build plans and channel inventory" in response to memory constraints . Management declined to break out regional exposure but indicated Qualcomm's China risk is "less than what you would just see based on the units" due to tier mix .
On Data Center Progress:
"We expect 27 to start showing in revenues... the only thing I'll add on data center is, we've mentioned previously that we expect this to be a multi-billion revenue opportunity in a couple of years."
— Akash Palkhiwala, CFO
On Huawei License: Alex Rogers stated "no update on the Huawei discussions. The discussions are still underway" and described the Huawei and Apple licensing negotiations as "fairly distinct, actually significantly distinct, operating on different paths" .
On Q2/June Seasonality: Management expects March quarter to be "a reasonable way to model June as well" with similar seasonality profile, though emphasized that supply will define the financial forecast for the rest of the fiscal year .
CEO Commentary
"We are pleased to deliver strong quarterly results, with record total company revenues. Our momentum across personal, industrial and physical AI is growing, as evidenced by recent product announcements at CES and customer traction. While our near-term handsets outlook is impacted by industry-wide memory supply constraints, we are encouraged by end-consumer demand for premium and high tier smartphones, and remain on track to achieve our fiscal 2029 revenue goals."
— Cristiano Amon, President and CEO
The message is clear: short-term pain, long-term thesis intact. The fiscal 2029 revenue targets referenced likely relate to Qualcomm's diversification goals across automotive, IoT, and data center.
Forward Catalysts
Ask Fintool AI AgentThe Bottom Line
The Quarter: Exceptional. Record revenue, massive beats on both top and bottom line, continued automotive momentum, and strategic M&A execution.
The Guidance: Concerning. Memory supply constraints are a real headwind, and Q2 is going to be ugly relative to expectations.
The Stock: At ~12x forward earnings post-selloff, QCOM looks cheap for a company executing on diversification while maintaining licensing margins. The question is whether memory issues extend beyond Q2.
For long-term investors, this could be an entry point. For traders, the guidance miss matters more than the beat.
Earnings call transcript available at Qualcomm Investor Relations