Qualcomm’s first quarter results were shaped by continued strength in its automotive and Internet of Things (IoT) segments, along with rising design activity in AI-enabled devices. Management highlighted that the company achieved another record in automotive revenues and maintained stable IoT momentum, even as overall sales declined year-over-year. CEO Cristiano Amon pointed to “a step function increase in strategic customer engagement,” attributing this to Qualcomm’s technology leadership in agentic AI, which refers to devices running on-device artificial intelligence capable of orchestrating multi-step tasks with context and security. Management also noted that the QCT handset business remained pressured by cautious OEM behavior and inventory drawdowns, especially in China.
Is now the time to buy QCOM? Find out in our full research report (it’s free for active Edge members).
Qualcomm (QCOM) Q1 CY2026 Highlights:
- Revenue: $10.6 billion vs analyst estimates of $10.58 billion (2.2% year-on-year decline, in line)
- Adjusted EPS: $2.65 vs analyst estimates of $2.56 (3.6% beat)
- Adjusted EBITDA: $3.69 billion vs analyst estimates of $3.62 billion (34.8% margin, 1.9% beat)
- Revenue Guidance for Q2 CY2026 is $9.6 billion at the midpoint, below analyst estimates of $10.26 billion
- Adjusted EPS guidance for Q2 CY2026 is $2.20 at the midpoint, below analyst estimates of $2.43
- Operating Margin: 21.8%, down from 28.8% in the same quarter last year
- Inventory Days Outstanding: 146, up from 123 in the previous quarter
- Market Capitalization: $196.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Qualcomm’s Q1 Earnings Call
- Joshua Buchalter (TD Cowen) asked for details on the custom silicon engagement with a hyperscaler. CEO Cristiano Amon said the project is multi-generational and leverages Alphawave integration but withheld specifics until Investor Day.
- Samik Chatterjee (JPMorgan) questioned Qualcomm’s competitive positioning in data center AI. Amon explained that the company’s strengths include high-performance CPUs, custom silicon, and edge device integration, with further details to be shared in June.
- Stacy Rasgon (Bernstein Research) inquired about the timing of handset recovery in China and the impact of memory supply constraints. CFO Akash Palkhiwala stated shipments will align more closely with demand after inventory drawdown ends.
- Timothy Arcuri (UBS) asked about the pace and scope of the custom silicon ramp and Alphawave’s contribution. Amon confirmed the project builds on existing customer engagement and will deliver both Qualcomm and Alphawave IP.
- Ross Seymore (Deutsche Bank) explored the mix shift in handsets and the impact on automotive margins. Palkhiwala noted premium handset demand remains resilient, and automotive revenue is poised to accelerate due to higher silicon and software content.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will be watching (1) the timing and magnitude of handset shipment recovery in China and other key markets, (2) the commercial ramp of the fifth-generation Snapdragon Digital Chassis and new agentic AI-enabled PCs, and (3) initial progress and customer feedback from custom silicon shipments to hyperscalers. Execution on these milestones will serve as key indicators of Qualcomm’s ability to diversify revenue and maintain technology leadership.
Qualcomm currently trades at $191.04, up from $156 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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