QCOM Stock Surges Over Expectations Of Chinese Smartphone Market Lull Ending

• QCOM reported sales of $10.6 billion in the second quarter. 
• Sees Q3 sales at $9.2 billion to $10 billion. 
• A top hyperscaler is on track to begin using Qualcomm's chips later this year.

Shares of Qualcomm (QCOM) jumped 13% in after-hours trading after the company forecast a rebound in mobile phone sales in China — its largest market — following the third quarter, even though its fiscal Q3 revenue and earnings guidance fell short of Wall Street expectations. 

QCOM forecasted third-quarter earnings to be between $2.10 to $2.30 a share, excluding certain items, lower than what analysts projected at $2.38 a share.

However, its earnings for the second-quarter ending March 2026 came in at $2.65 a share when excluding some items, beating analyst estimations of $2.55 a share for the quarter. Total revenue reached $10.6 billion, slightly above the anticipated $10.58 billion. 

Qualcomm’s phone-related revenue was $6 billion, roughly in line with analysts’ estimates. Internet-connected devices generated sales of $1.73 billion, while the automotive market generated $1.33 billion, a significant 38% year-over-year increase.

“Automotive, we delivered another record quarter, with revenues of $1.3 billion, representing 38% year-over-year growth, driven by accelerating demand and increasing content per vehicle due to the transition of new digital cockpit and ADAS launches to our 4th generation chipsets,” said Akash Palkhiwala, Chief Financial Officer, Qualcomm. 

QCOM AI Pipeline 

Supply chain constraints in the memory chip space and most of its customers spending more on AI-focused products have made a dent in their outlook. 

The San Diego-based company is navigating “a challenging memory environment,” Chief Executive Officer Cristiano Amon said in the statement. 

The company is trying to offset the drop in revenue in the smartphone business by boosting its automotive and other departments. 

“We’re pursuing multiple opportunities with large hyperscalers, cloud service providers, sovereign AI projects, and other global partners,” said Cristiano Amon, President and Chief Executive Officer, Qualcomm. “Building on that momentum, we’re also entering the custom silicon space, beginning our ramp with a leading hyperscaler.”

QCOM Retail View

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes.  

One user highlighted that the agentic AI plays are getting strong. 

The stock has lost 9% year-to-date.

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