Buy, Sell or Hold QCOM Stock? Key Tips Ahead of Q1 Earnings Release

Core Viewpoint - Qualcomm is set to report its first-quarter fiscal 2026 earnings on February 4, with revenue and earnings estimates at $12.23 billion and $3.37 per share, respectively. However, earnings estimates for fiscal 2026 have declined by 1.2% to $12.00 per share over the past 60 days, and estimates for fiscal 2027 have also decreased from $12.60 to $12.33 per share [1][6]. Earnings Estimates - The current earnings estimates for Q1 fiscal 2026 stand at $3.37 per share, with revenue estimates at $12.23 billion. Over the past 60 days, earnings estimates have seen a decline of 1.23% for fiscal 2026 and 2.14% for fiscal 2027 [2][6]. - The earnings surprise history shows an average surprise of 6% over the last four quarters, with the last reported quarter achieving a surprise of 4.2% [2][3]. Product Launches - Qualcomm launched AI200 and AI250 chip-based AI accelerator cards and racks during the fiscal first quarter, which are expected to boost revenues due to their advanced features for data centers [7]. - The company also introduced the Qualcomm Dragonwing IQ-X Series, an industrial-grade processor aimed at enhancing smart manufacturing, which is likely to contribute to higher revenues [8]. Regulatory Challenges - Qualcomm is facing antitrust probes in China, which could impact its operations and revenue, as the country represents a significant portion of its market. The investigation stems from Qualcomm's failure to notify Chinese regulators about its acquisition of Autotalks [9][10]. - The ongoing trade tensions between the U.S. and China pose additional risks to Qualcomm's performance, particularly given its substantial revenue dependence on the Chinese market [10][15]. Market Performance - Over the past year, Qualcomm's stock has declined by 12%, underperforming the industry growth of 41.5%, with competitors like Broadcom and Hewlett Packard showing significant gains [11]. - From a valuation perspective, Qualcomm's shares are trading at a forward P/E ratio of 12.57, which is lower than the industry average of 33.44 and its historical mean of 16.84, indicating a relatively cheaper valuation [13]. Strategic Focus - Qualcomm aims to maintain its leadership in 5G and mobile connectivity through innovative product launches, including AI chips and industrial processors [14]. - Despite its efforts in AI, Qualcomm faces challenges in sustaining operations in China due to escalating tariffs and regulatory scrutiny, which may affect its long-term viability in the region [15][16].