| | | Qualcomm Stock Slides After Earnings Beat
By Adam Levine
Updated Nov 06, 2025, 7:01 am EST / Original Nov 05, 2025, 12:01 am EST
Shares of Qualcomm were sliding on Thursday despite strong results from the chip maker.
The company reported adjusted earnings of $3.00 a share in its fiscal fourth quarter, versus Wall Street estimates for $2.87. Revenue came in at $11.27 billion, surpassing the $10.77 billion consensus estimate, according to FactSet.
Shares of Qualcomm were down 1.9% in premarket trading.
First-quarter guidance also beat Wall Street projections, but expense growth exceeded expectations, and the outlook for automotive chip sales was soft, made up for in other parts of the business.
The highlight of the fourth quarter was chip revenue at $9.8 billion, which surpassed Wall Street estimates of $9.4 billion. All three categories—Qualcomm’s core smartphone chips plus automotive and internet-of-things–beat the consensus estimates. Chip sales were up 13% from last year; discounting the company’s fading business with Apple, it was up 18%.
Though global Android phone sales aren’t particularly strong, Qualcomm dominates the high end, a growing part of the market, and it is outpacing the industry.
Licensing revenue was down, but not as badly as was expected. Qualcomm has the best cellular radio chips and it uses that leverage to charge a per-device royalty on smartphones. This requirement has led to a lot of friction with customers and antitrust agencies worldwide. Though Qualcomm has escaped regulation in the U.S., the same can’t be said for China and South Korea, where the company long ago paid fines and agreed to change its licensing terms.
The biggest customer conflict was with Apple, which chafed at the per-device royalties. Though Apple settled an antitrust suit to Qualcomm’s favor in 2019, it spent the last six years looking to replace Qualcomm’s 5G chips with its own silicon. The process of Qualcomm losing Apple’s business has begun with certain low-volume iPhones and the 2025 iPad Pro. Apple hasn’t cracked the hardest part of this shift, still unable to support the problematic 5G “millimeter-wave” frequencies at the top end of the spectrum.
Qualcomm has been preparing investors for the loss of Apple’s chip sales for years now, so it is already likely to be factored into the share price.
Qualcomm highlighted its new AI accelerator chips and servers, which it expects to provide material revenue in 2027. But but there is a long road for them to make a big dent in Qualcomm’s financials. The first job is convincing customers to forgo the industry-standard, Nvidia.
The biggest hurdle may be finding customers besides “hyperscalers” such as Amazon Web Services, Microsoft’s Azure, and Google Cloud, which prefer their own chips as an alternative to Nvidia.
Write to Adam Levine at adam.levine@barrons.com |
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