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

TLDR

• Qualcomm releases Q1 fiscal 2026 earnings February 4 with Wall Street forecasting EPS of $3.39 and $12.12 billion revenue
• Stock dropped 0.41% to $151.59 Friday, down 11% over past year from chip shortages and weak smartphone demand
• Apple’s in-house modem development threatens Qualcomm’s largest revenue source
• Analysts divided with price targets ranging from $160 to $225, consensus shows 27.5% upside potential
• Memory shortages and pricing pressure expected to reduce global handset shipments 4% in 2026

Qualcomm shares fell 0.41% to $151.59 Friday as traders positioned ahead of the company’s Q1 fiscal 2026 earnings report dropping after market close February 4. The stock has shed nearly 11% over the past year.

QUALCOMM Incorporated, QCOM

Wall Street expects earnings per share of $3.39, down slightly from $3.41 last year. Revenue forecasts call for $12.12 billion, up 3.8% year-over-year. The company has topped earnings estimates for eight straight quarters.

The earnings call at 1:45 p.m. Pacific time will reveal critical details about premium Android demand and licensing royalties. These factors drive investor sentiment more than raw numbers because they signal future performance trends.

Traders want updates on customer inventory and new device chip wins. Weakness in either area could hammer the stock given current market jitters over inflation and Federal Reserve policy.

Apple Modem Plans Create Revenue Risk

Apple represents Qualcomm’s biggest customer through QCT segment chip sales. The iPhone maker is developing its own modems, which directly threatens this revenue stream. Samsung and Xiaomi contribute smaller amounts to Qualcomm’s top line.

Qualcomm is pushing into automotive and IoT markets to reduce Apple dependency. This diversification strategy aims to cushion the blow when Apple’s internal modems eventually replace Qualcomm chips.

Wall Street Split on Stock Direction

Mizuho Securities analyst Vijay Rakesh maintains a Hold rating but slashed his price target from $175 to $160. He forecasts global handset shipments dropping 4% in 2026, with steeper declines in the second half from memory shortages and pricing pressure.

UBS analyst Timothy Arcuri also cut his target from $185 to $160 citing identical concerns. Wells Fargo analyst Aaron Rakers holds a Sell rating but lifted his target from $140 to $165.

Rosenblatt Securities analyst Kevin Cassidy takes the opposite view with a Buy rating and Street-high $225 price target representing 48.4% upside. He points to CES 2026 showcasing explosive growth in network edge AI products like wearables, health monitors, robotics, and gaming devices.

The consensus lands at Moderate Buy with 10 Buy, six Hold, and one Sell rating. The average price target of $193.33 implies 27.5% upside from current prices.

Market Volatility Pressures Tech Sector

The chip sector showed mixed action last week. Nvidia dropped 0.7% and Texas Instruments fell 1.5% while Broadcom gained 0.2%. This scattered performance reflects industry-wide uncertainty.

Markets declined Friday after President Trump nominated Kevin Warsh to lead the Federal Reserve. Stronger-than-expected Producer Price Index data added to rate uncertainty.

Memory chip shortages, pricing pressure, and sluggish smartphone demand have weighed on Qualcomm throughout the past year. These headwinds affect the entire chipmaker space.

Qualcomm’s Q4 FY25 guidance projected Q1 revenues between $11.8 billion and $12.6 billion with adjusted EPS of $3.30 to $3.50. The QCT segment was forecast to generate $10.3 billion to $10.9 billion. Results will be submitted via Form 8-K to the SEC.

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