Qualcomm's handset chip revenue falls 26% as auto chips jump 89%; shares slide after hours

US chipmaker Qualcomm reported fiscal fourth-quarter 2026 results on November 4 (quarter ended September 27): handset chip revenue fell 26% year over year to $5.14 billion, below the roughly $5.25 billion analysts expected, while total revenue was $10.32 billion, down 8%, and adjusted earnings per share were $2.17, slightly above the $2.16 estimate. Shares fell more than 6% in extended trading after the report. (Cover photo is a file photo.)

Handsets drag: global shipments at a 14-year low

According to Reuters, handset chip revenue missed expectations mainly because of sluggish demand and declining Apple-related revenue. Counterpoint Research data showed global smartphone shipments fell 20% in the September quarter to their lowest in 14 years, as surging memory chip prices driven by AI data-centre demand pushed up phone prices. Qualcomm's chip division (QCT) reported total revenue of $9.02 billion, down 8%. Analyst Anshel Sag of Moor Insights & Strategy said the 26% handset decline was the main reason the stock fell, adding that, "considering the size of that business, it really drags things down quite a bit."

Auto chips up 89%; IoT also grows

There were bright spots: automotive chip revenue rose 89% year over year to $1.99 billion, and IoT chip revenue rose 4% to $1.89 billion; combined, the auto and IoT gains offset about 56% of the handset decline. Chief Executive Cristiano Amon said Android handset sales had bottomed out and were ticking upward again; the company expects non-handset revenue to grow more than 60% in fiscal 2027 and reiterated a $5 billion data-centre revenue target. Qualcomm also said it has renewed long-term patent licence agreements with Apple, Huawei and Transsion.

Outlook: no Apple chip sales assumed next quarter

Qualcomm forecast fiscal first-quarter 2027 revenue of $10.4 billion to $11.2 billion and adjusted earnings per share of $2.15 to $2.35, with the midpoint of the guidance slightly below market expectations. Amon said the first-quarter forecast assumes no further chip sales to Apple, and the company expects non-handset revenue eventually to replace the Apple business entirely. Chief Financial Officer Akash Palkhiwala had already warned that Apple-related revenue in the December quarter would fall roughly 50% from the September quarter. For fiscal 2026 as a whole, Qualcomm's revenue was $43.12 billion, down 3%.

(Sources: Reuters, November 4, 2026; Motley Fool; TechBooky; SiliconANGLE; Zacks. The handset revenue estimate is the Visible Alpha analyst average. Cover photo is a file photo.)