Is Qualcomm Stock (QCOM) a Buy Ahead of Earnings Wednesday?

TLDR

• Qualcomm reports Q1 fiscal 2026 earnings on February 4, with analysts expecting EPS of $3.39 and revenues of $12.12 billion
• QCOM stock fell 0.41% to $151.59 ahead of earnings, down nearly 11% over the past year
• Analysts maintain Moderate Buy rating with average price target of $193.33, implying 27.5% upside
• Apple’s plan to produce its own modems poses risk to Qualcomm’s revenue from its largest customer
• Global handset shipments projected to decline 4% in 2026 due to memory chip shortages and pricing pressures

Qualcomm stock closed down 0.41% at $151.59 last Friday as investors prepared for the company’s first-quarter fiscal 2026 earnings release after market close on February 4. The stock traded between $149.83 and $153.07 during the session before dipping to $151.44 in after-hours trading.

QUALCOMM Incorporated, QCOM

Wall Street expects adjusted earnings per share of $3.39, a slight decline from last year’s $3.41. Revenue projections sit at $12.12 billion, representing 3.8% year-over-year growth. The company has beaten earnings expectations for eight consecutive quarters.

Qualcomm’s guidance from its Q4 FY25 earnings projected Q1 revenues between $11.8 billion and $12.6 billion. Its QCT segment was forecast to generate $10.3 to $10.9 billion, with adjusted EPS ranging from $3.30 to $3.50.

The earnings call scheduled for 1:45 p.m. Pacific time will give investors insight into premium Android demand and licensing royalties. These metrics often matter more than raw quarterly figures because they signal future trends.

Market participants are watching for updates on customer inventory levels and chip content wins in new devices. Any weakness in handset demand or licensing collections could pressure the stock in an already cautious market environment.

Apple Modem Threat Looms

Apple remains Qualcomm’s largest customer, contributing heavily to the QCT segment. The iPhone maker plans to start producing its own modems, which threatens Qualcomm’s revenue stream. Samsung and Xiaomi provide smaller contributions, pushing Qualcomm to diversify its customer base.

The company is working to reduce Apple dependency by expanding into automotive and IoT verticals. This strategy aims to offset potential losses from Apple’s in-house modem development.

Analyst Opinions Vary Widely

Mizuho Securities analyst Vijay Rakesh kept his Hold rating but cut his price target from $175 to $160, citing a projected 4% decline in global handset shipments for 2026. He expects steeper drops in the second half from memory shortages and pricing pressures.

UBS analyst Timothy Arcuri also reduced his target from $185 to $160 for similar reasons. Wells Fargo analyst Aaron Rakers maintained a Sell rating but raised his target from $140 to $165.

Rosenblatt Securities analyst Kevin Cassidy offered a contrasting view. He reiterated his Buy rating with a Street-high price target of $225, representing 48.4% upside potential. Cassidy pointed to CES 2026, which showcased growth in network edge AI products including wearables, AI companions, health monitors, robotics, entertainment, security, and gaming devices.

The consensus rating stands at Moderate Buy based on 10 Buy, six Hold, and one Sell rating. The average price target of $193.33 implies 27.5% upside from current levels.

Broader Market Headwinds

The chip sector showed mixed performance last week. Nvidia declined 0.7% and Texas Instruments fell 1.5%, while Broadcom gained 0.2%. This uneven sentiment reflects uncertainty across the industry.

Markets ended Friday lower after President Donald Trump nominated Kevin Warsh to lead the Federal Reserve. Combined with stronger-than-expected Producer Price Index data, the news raised questions about future interest rates.

QCOM shares have lost nearly 11% over the past year. Memory chip shortages, pricing pressures, and sluggish smartphone demand have weighed on the stock. These challenges affect the entire chipmaker industry.

Qualcomm will submit its earnings report via Form 8-K to the SEC. Investors will analyze management commentary for guidance on revenue trends, licensing strategy, and growth in automotive and IoT markets.

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