Qualcomm Beats Profit Estimates, but Shares Fall on Weak Handset Forecast
Qualcomm reported adjusted fourth-quarter fiscal 2026 earnings per share of $2.17 on Wednesday, November 4, 2026, one cent above the $2.16 analysts had expected. The company's shares fell 5% on a weak earnings forecast, with the CNBC report citing a memory shortage that weighed on smartphone sales.
Analysts had expected revenue of $10.12 billion for the quarter. The fiscal fourth quarter ran from June 29 to September 27, 2026, according to Qualcomm's published calendar. The company had scheduled the results release and conference call on October 22.
The handset picture is the source of the forecast pressure. The Verge reported that smartphone sales fell by around 20 percent compared with 2025. In July, Qualcomm had forecast fiscal fourth-quarter handset revenue of about $5.2 billion, and Reuters reported at the time that the company expected lower Apple revenue. Qualcomm said Android growth would help fourth-quarter handset revenue despite that decline. Handset revenue here means the money Qualcomm earns from the modem and processor chips it sells into phones.
The larger change in the story is the data center plan Qualcomm outlined on its Q4 2026 earnings call. According to The Verge, the company is pursuing AI data center business through partnerships with Amazon and Meta. It forecast around $650 million in data center revenue for the first quarter of 2027. It expects that revenue to reach $5 billion by the end of 2027 and $15 billion by 2029. Qualcomm also expects data centers to eventually account for around 30 percent of its business. These are targets and expectations, not reported results. The path to them depends on partner deployments that the company has yet to report as revenue.
The same report notes that AMD expects over 80 percent of its revenue to eventually come from data centers. Qualcomm's targets sit well below that level, even at the company's own plans.
On the product side, Qualcomm showcased an AI-native broadband platform at Network X 2026. The platform, called gFiber, is built on the Qualcomm Dragonwing NPro A8 Elite Platform, according to the company's Q4 2026 earnings presentation. It is an access-network product rather than a data center part, so it sits outside the revenue targets above.
In my view, the forecast reaction and the data center targets are two sides of the same question. Qualcomm is guiding to a handset business that is contracting while it tries to build a second revenue base almost from zero. The 2027 and 2029 figures will show whether the Amazon and Meta partnerships turn into shipments at scale. For now, investors have reacted to the near-term number.
The broader context here is that the low-power on-device AI processing that makes a modem and NPU (the block on a chip that runs neural-network workloads) useful in a phone is the same capability Qualcomm wants to carry into inference servers and fixed broadband. If that transfer works, the company gains a second market where its design wins are counted in server racks rather than phone launch cycles. If it does not, the memory cost pressure that hit phones will still have to be absorbed somewhere else in the bill of materials. Either outcome should be visible in the quarterly numbers over the next two years.
