Do Rising Earnings Estimates Strengthen the Case for Qualcomm Stock?

Core Insights - Earnings estimates for Qualcomm Incorporated (QCOM) for fiscal 2026 and fiscal 2027 have increased by 2% to $12.14 and 3% to $12.65, respectively, indicating positive investor sentiment [1][6]. Financial Performance - Current earnings estimates for Q1 and Q2 are $3.36 and $2.95, respectively, with fiscal year estimates for FY26 and FY27 at $12.14 and $12.65 [2]. - The earnings estimate revisions over the past 60 days show an increase of 3.70% for Q1, 1.37% for Q2, 2.02% for FY26, and 3.01% for FY27 [2]. Business Segments - Qualcomm is benefiting from its Snapdragon portfolio, which is driving growth in the mobile space, particularly with 5G technology [4][5]. - The company is expanding into AI capabilities with the launch of the Snapdragon X chip for mid-range AI desktops and laptops, aiming to diversify its revenue streams beyond the smartphone market [4]. - Automotive revenues reached a record high of $1.05 billion in Q4 FY25, reflecting a 17% increase, driven by new vehicle launches and the growth of connected vehicles [6][5]. Market Position and Challenges - Qualcomm's shares rose 9% over the past year, underperforming compared to the industry growth of 71.2% and peers like Broadcom, which surged 122.6% [8]. - The ongoing U.S.-China trade tensions are impacting Qualcomm's growth potential, as the company faces challenges in maintaining operations in China and increased competition from domestic chipmakers [9][10]. - High operating expenses and R&D costs have led to declining margins, with expectations of continued softness in the handset market affecting profitability [11][16]. Strategic Outlook - Qualcomm's focus on quality and operational execution, along with continuous portfolio enhancements, is expected to drive value for customers [15]. - Despite robust automotive and Snapdragon traction, the company faces stiff competition and market pressures that may hinder bottom-line growth [16].