Qualcomm (QCOM) Q4 2025 Earnings Preview

Qualcomm (QCOM) has reported a strong fiscal fourth quarter, surpassing analyst expectations and offering an optimistic outlook for the coming year. The results underscore the company’s successful diversification efforts and its strategic positioning in the burgeoning AI market.

The semiconductor giant reported the following key figures:

• Earnings per share: $3.00 adjusted vs. $2.88 expected
• Revenue: $11.27 billion vs. $10.79 billion expected

This represents a 10% increase in revenue compared to the $10.24 billion reported a year earlier, according to the company’s statement. However, a notable income tax expense resulted in a net loss of $3.12 billion, or $2.89 a share, contrasting with the previous year’s net income of $2.92 billion, or $2.59 per share.

Looking ahead, Qualcomm anticipates revenue in the range of $11.8 billion to $12.6 billion for the fiscal first quarter, settling at a midpoint of $12.2 billion. This exceeds the average analyst estimate of $11.62 billion. The company projects adjusted EPS between $3.30 and $3.50, aligning with analyst forecasts of $3.31 per share. Market analysts attributed this positive guidance to strong performance in the handset and automotive sectors and anticipation surrounding the AI offerings.

Historically, Qualcomm has dominated the mobile chip market, providing crucial components like central processors and modems for high-end smartphones from manufacturers like Samsung, as well as modems for Apple iPhones. However, the evolving landscape necessitates strategic adaptation.

Acknowledging the anticipated loss of Apple as a modem customer in the future, Qualcomm has been proactively diversifying its business. This includes developing chips for Windows PCs, virtual-reality headsets, and smart glasses for companies like Meta. The strategic shift aims to reduce reliance on a single client and capitalize on emerging tech trends.

While the PC and VR/AR markets present opportunities, the greatest potential lies in artificial intelligence. This is a sector where Nvidia has gained significant market share with its high-performance GPU solutions, specifically tailored for AI and machine learning applications. AMD is also actively striving to close the gap and challenge Nvidia’s dominance. These chips are generally based on a graphics processing unit (GPU) architecture, that is specifically tooled for parallel workloads.

Last week, Qualcomm unveiled plans to introduce new AI accelerator chips, a disclosure that sparked an 11% surge in the company’s stock price. The AI200, slated for release in 2026, and the AI250, planned for 2027, are designed to be deployed in full, liquid-cooled server racks, indicating Qualcomm’s ambition to compete directly in the data center AI space. This represents a strategic shift toward providing total solutions, including both hardware and software.

Currently, Nvidia and AMD offer their GPUs in full-rack systems, enabling up to 72 chips to function as a unified supercomputer. This immense computing power is essential for AI research labs to develop and deploy cutting-edge AI models. Qualcomm’s entry into this market signifies a direct challenge to the established players and a move to capture a significant share of the rapidly growing AI infrastructure market. This is traditionally the domain of CPU clusters, but GPU-base systems have been gaining traction in AI/ML workloads.

As of Wednesday’s close, Qualcomm shares are up 17% year-to-date, falling short of the Nasdaq’s 22% gain. In comparison, Nvidia and AMD have surged by 45% and 112%, respectively, highlighting the market’s enthusiasm for companies deeply ingrained in the AI sector.

Breaking down Qualcomm’s revenue streams, the handsets business saw a 14% increase, reaching $6.96 billion in the latest quarter. Automotive sales climbed 17% to $1.05 billion, demonstrating strong growth in connected vehicle technologies. Qualcomm’s Meta revenue, reported under its Internet of Things (IoT) division, registered $1.81 billion in sales during the quarter, a 7% increase year-over-year.

According to StreetAccount, all three of these segments outperformed analyst estimates, further solidifying Qualcomm’s market position and growth trajectory.

Qualcomm’s licensing business experienced a 7% decline, generating $1.41 billion in revenue. Yet, these figures still exceeded analyst expectations, reflecting the company’s continued strength in intellectual property licensing.