Qualcomm Beats Earnings Despite Apple Split, Diversifies Revenue

Qualcomm reported solid Q3 earnings with $10.4 billion in revenue and $2.77 earnings per share, beating Wall Street estimates, but its stock declined due to investor concerns about Apple shifting to in-house modem chips starting with the iPhone 16e. This transition poses a significant risk to Qualcomm's handset segment, which still accounts for around 60% of revenue, though non-Apple chip revenue has grown over 15%, primarily driven by premium Android devices. The company is actively diversifying its business, with strong growth in IoT (24% increase) and automotive (21% increase) segments, including the Snapdragon Digital Chassis for connected vehicles, which Qualcomm considers a major opportunity. Despite slowing growth and increasing competition from MediaTek, especially in mid-range segments, Qualcomm remains optimistic about its expansion into new areas such as AI chipsets, AR/VR devices, data centers, and wearables. Analysts remain cautiously optimistic, with average price targets suggesting upside potential, but emphasize the challenges Qualcomm faces amid a competitive semiconductor environment and Apple’s reduced reliance on its modems. Overall, Qualcomm is navigating the loss of Apple business by accelerating growth in diversified markets and technological innovation.