W.014Qualcomm’s handset sales fell 26%. Its $5B data center year starts above $650M
Qualcomm’s fiscal fourth-quarter revenue fell 8% to $10.32B, as handset chip sales dropped 26% and automotive rose 89%. Its first-quarter guidance, the first to include data center, calls for more than $650M from that business. Qualcomm reiterated a $5B data center target for fiscal 2027; at $650M in the first quarter, the other three would need about $4.35B, or $1.45B each.
Handsets went from 71% of chip sales to 57% in a year
QCT (chip) revenue by stream, $M, for the quarter a year earlier, the prior quarter and fiscal Q4 2026, from Qualcomm’s releases; and its guidance for fiscal Q1 2027, the first to include data center, which it does not split by stream (solid to the low end, outlined to the high end). Licensing (QTL) is not included.
Data
| $M | Q4 FY25 | Q3 FY26 | Q4 FY26 | FY25 | FY26 | FY26 change |
|---|---|---|---|---|---|---|
| Handsets | 6,961 | 5,086 | 5,137 | 27,793 | 24,072 | −13% |
| Automotive | 1,053 | 1,588 | 1,990 | 3,957 | 6,004 | +52% |
| IoT | 1,807 | 1,830 | 1,888 | 6,617 | 7,132 | +8% |
| QTL (licensing) | 1,409 | 1,278 | 1,304 | 5,582 | 5,556 | −0% |
| Revenue (GAAP) | 11,270 | 9,947 | 10,322 | 44,284 | 43,120 | −3% |
The quarter
Handsets missed; automotive carried the rest. Handset chip revenue was $5,137M, against $6,961M a year earlier and the $5.25B analysts expected, according to Reuters, citing Visible Alpha. Automotive was $1,990M and IoT $1,888M. Total revenue of $10,322M was above LSEG’s $10.11B estimate, as reported by CNBC; non-GAAP revenue was $10,442M, because Qualcomm excludes a $120M payment to a customer after a legal settlement. Non-GAAP earnings per share were $2.17, against $3.00.
For the year, non-handset chips grew 24%. Fiscal 2026 automotive and IoT revenue together was $13.14B, against $10.57B; handsets fell 13% to $24.07B, and total revenue fell 3% to $43.12B.
A year of chip sales: handsets down $1.8B, automotive up $0.9B
QCT revenue, $M, fiscal Q4 2025 to fiscal Q4 2026, by stream, from Qualcomm’s release. The streams sum to the QCT totals; the release has no separate data center line for the quarter.
Data center enters the guidance
The first quarter’s guidance is the first to include data center. Qualcomm guided fiscal Q1 2027 revenue to $10.4B–$11.2B, with QCT at $9.0B–$9.6B inclusive of data center. Reuters reported data center guidance of $650M against Visible Alpha’s $539M estimate; on the call, chief financial officer Akash Palkhiwala said Qualcomm is guiding to more than $650M, and the presentation says at least $650M, according to Securities.io. Reuters also reported that the forecast includes no further sales of Qualcomm products to Apple.
The full-year target is $5B, and the presentation’s exit rate is $7B. Qualcomm’s release reiterated the $5B data center target for fiscal 2027. Its presentation describes an annualized run rate of about $7B on exiting the year, according to Securities.io, and the CFO gave the same figure on the call, according to StreetSignal’s summary. At $650M in the first quarter, $5B needs $4,350M from the next three, an average of $1,450M, 2.2 times the first; a $7B annual rate is $1,750M a quarter, 2.7 times. Amazon, which in September agreed it may buy up to $60B of Qualcomm’s AI data center products, received warrants for up to 25M shares at $161.26, which Qualcomm valued at about $1.8B, according to Reuters.
Profit guidance came in under estimates and the shares fell. The non-GAAP earnings guidance midpoint, $2.25, is below the $2.27 consensus Reuters cited, while the revenue midpoint, $10.8B, is above LSEG’s $10.48B. Qualcomm’s shares were down more than 6% in after-hours trading on November 4, Reuters reported.
What the target asks of the next three quarters
Data center revenue a quarter, $M. The first bar is Qualcomm’s guidance for fiscal Q1 2027, given as more than $650M and drawn at $650M. The second is what Q2–Q4 would have to average for the year to reach the $5B target; the third is one quarter at the $7B annualized exit rate in Qualcomm’s presentation. Both are derived from Qualcomm’s targets, not forecasts. The grey bar beside the guidance is Visible Alpha’s Q1 estimate, cited by Reuters.
What this changes on 06.ai
- Series lead: Qualcomm data center revenue by quarter against its $5B fiscal 2027 target and $7B exit rate. The first actual, for the December quarter, arrives with fiscal Q1 results in early 2027.
- Pack lead (AI compute demand): Qualcomm’s custom-silicon work with Amazon is a supply line the pack’s accelerator count does not yet carry separately.
Sources and method
| Item | Figure | Source |
|---|---|---|
| Results | Q4 FY26 revenue $10,322M GAAP, $10,442M non-GAAP (Q4 FY25 $11,270M); a $120M payment to a customer after a legal settlement reduced GAAP revenue; EPS $1.17 GAAP, $2.17 non-GAAP ($3.00); QCT $9,015M: handsets $5,137M, automotive $1,990M, IoT $1,888M; QTL $1,304M; QCT EBT margin 24% (29%); fiscal 2026 by segment; Q1 FY27 guidance: revenue $10.4–11.2B, QCT $9.0–9.6B, QTL $1.3–1.5B, non-GAAP EPS $2.15–2.35, inclusive of data center; data center target of $5B for fiscal 2027; collaboration with Amazon; QTL renewals with Apple, Huawei and Transsion | Qualcomm, Nov 4 |
| Prior quarter | Q3 FY26: revenue $9,947M; handsets $5,086M, automotive $1,588M, IoT $1,830M; QTL $1,278M; non-GAAP EPS $2.21 | Qualcomm 8-K exhibit 99.1, Jul 29 |
| Estimates, Apple | Data center guidance of $650M against Visible Alpha’s $539.1M; handsets $5.14B against $5.25B; revenue guide against LSEG’s $10.48B; non-GAAP EPS consensus $2.27; forecast includes no further Apple product sales; Amazon warrants valued at about $1.8B; shares down more than 6% after hours | Reuters, via Investing.com, Nov 4 |
| Exit rate | Data center at least $650M in Q1 and a $7B annualized run rate exiting fiscal 2027, per the earnings presentation; $5B target kept | Securities.io, Nov 4 |
| Call | CFO: guiding greater than $650M of data center revenue in the first quarter; exiting the year at approximately a $7B run rate | StreetSignal call summary, Nov 4 |
| Amazon | Amazon may buy up to $60B of AI data center products; warrants with a $161.26 exercise price | Reuters, via The Star, Sep 8 |
| Q4 estimates | Q4 revenue estimate $10.11B (LSEG); handsets estimate $5.21B (StreetAccount) | CNBC, via ua.news, Nov 4 |
QCT is handsets + automotive + IoT: $6,961M + $1,053M + $1,807M = $9,821M a year earlier, and $5,137M + $1,990M + $1,888M = $9,015M now. Handsets’ share fell from 70.9% to 57.0%. Growth: revenue $10,322M ÷ $11,270M − 1 = −8.4%; handsets −26.2%; automotive +89.0%; non-handset fiscal 2026 ($6,004M + $7,132M) ÷ ($3,957M + $6,617M) − 1 = +24.2%.
Data center: ($5,000M − $650M) ÷ 3 = $1,450M; $7,000M ÷ 4 = $1,750M; ratios to $650M are 2.23 and 2.69. Because the first quarter is guided at more than $650M, the Q2–Q4 figure is an upper bound on what the target needs. The $7B exit rate is reported from the presentation and the call, neither of which 06.ai read directly. Guidance midpoints: ($10,400M + $11,200M) ÷ 2 = $10,800M; ($2.15 + $2.35) ÷ 2 = $2.25. Warrants: 25M × $161.26 = $4.03B is their exercise value, not the $1.8B Qualcomm put on them. After-hours moves differed by time; Reuters’ evening figure is used.
Wire reports are written within hours of the news, on a six-hour schedule. Each lists its sources and shows the arithmetic behind its figures. Not investment advice.