Qualcomm Drops 21% in 2026 — Is BofA Right to Call It a Sell?

Core Viewpoint - Qualcomm's stock has dropped 21% year-to-date, trading around $135, despite reporting strong Q1 FY2026 earnings that exceeded expectations. Bank of America has initiated an Underperform rating with a $145 price target, primarily due to anticipated losses from Apple's modem business by 2027 as Apple develops its own chips. The broader analyst consensus remains at a Hold rating with an average price target of $168.48, indicating potential upside from current levels [1]. Financial Performance - Qualcomm reported Q1 FY2026 revenue of $12.25 billion, surpassing consensus estimates by $70 million. The QCT semiconductor segment achieved a record revenue of $10.61 billion, while automotive revenue exceeded $1.1 billion for the second consecutive quarter, reflecting a 15% year-over-year increase. Additionally, IoT revenue reached $1.69 billion, up 9% [1]. Analyst Ratings and Market Sentiment - Bank of America initiated coverage on Qualcomm with an Underperform rating and a $145 price target, indicating limited upside potential. Other analysts, including Daiwa Securities and Morgan Stanley, adjusted their ratings on the same day, suggesting a coordinated reevaluation of Qualcomm's prospects. Retail sentiment on platforms like Reddit has been bearish, with sentiment scores ranging from 20 to 36, well below neutral [1]. Market Outlook - The future of Qualcomm's stock hinges on its ability to execute in automotive, IoT, and AI edge computing sectors while stabilizing its handset business. If the impact of losing Apple's business is more severe than expected, Bank of America's bearish outlook may prove accurate. However, the company is currently delivering record revenues, indicating that it is not fundamentally broken [1].