VALUATION HIGHLIGHTS

1. CDMA Technologies constitute 86% of the Trefis price estimate for Qualcomm's stock.
2. Technology Licensing constitutes 13% of the Trefis price estimate for Qualcomm's stock.

WHAT HAS CHANGED?

Latest Earnings: Second Quarter Fiscal 2026

Qualcomm reported revenue of $10.6 billion for Q2 FY'2026, representing a solid beat against market expectations despite a challenging memory supply environment. Non-GAAP EPS reached $2.65, exceeding the consensus estimate of $2.55. Growth was primarily fueled by record automotive performance, which surged 38% year-over-year to $1.33 billion, and steady recovery in the IoT segment. While handset revenue remains the largest contributor, the company's aggressive diversification strategy is successfully mitigating volatility in the smartphone market.

Note: Qualcomm's FY'25 ended on September 28, 2024. Q2 FY'26 ended on March 29, 2026.

Snapdragon X Series Expansion and AI PC Leadership

At CES 2026, Qualcomm significantly expanded its Snapdragon X Series platform, introducing the Snapdragon X2 Plus to further penetrate the Windows 11 Copilot+ PC market. The new chipset features a high-performance NPU capable of 80 TOPS, positioning Qualcomm as a primary competitor to traditional x86 processors from Intel and AMD. This strategic pivot into the PC industry is a cornerstone of the company's effort to transform from a mobile-first chipmaker into a leader in edge-based generative AI computing.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Qualcomm's value that present opportunities for upside or downside to the current Trefis price estimate:

QCT Automotive and IoT

• Automotive Design Win Pipeline: Qualcomm's automotive design-win pipeline has reached approximately $45 billion, driven by the adoption of the Snapdragon Digital Chassis. If the company successfully converts this pipeline at a faster rate than the current Trefis estimate, there is significant upside potential as software-defined vehicles become the industry standard.


• Edge AI IoT Adoption: The IoT segment, which grew 9% to $1.73 billion in Q2, relies on the proliferation of industrial AI and robotics. A slower-than-expected rollout of agentic AI workloads in industrial settings could represent a downside risk to long-term diversification targets.

For additional details, select a division from the interactive Trefis split for Qualcomm at the top of the page.

BUSINESS SUMMARY

Qualcomm's business model is built on two primary segments: Qualcomm CDMA Technologies (QCT), which develops and sells semiconductor-based products for mobile devices, automotive, and IoT, and Qualcomm Technology Licensing (QTL), which grants licenses for the use of its extensive intellectual property portfolio.

SOURCES OF VALUE

The QCT segment, particularly the high-margin Snapdragon platforms, remains the most significant contributor to Qualcomm's enterprise value due to its dominance in the premium tier mobile and emerging automotive markets.

Dominant Intellectual Property Portfolio

The QTL segment maintains a massive competitive advantage with an EBT margin of 72% as of Q2 FY'2026. Qualcomm owns essential patents for 5G and early 6G standards, ensuring a recurring and highly profitable revenue stream from virtually every smartphone manufacturer globally.

Snapdragon Digital Chassis Ecosystem

In the automotive sector, Qualcomm has established a moat through a unified platform that integrates digital cockpit, connectivity, and ADAS. With over 400 million vehicles already utilizing Snapdragon solutions, the company is deeply embedded in the supply chains of major global automakers like BMW, Mercedes-Benz, and Volkswagen.

KEY TRENDS

On-Device Generative AI Revolution

The industry is shifting toward "agentic AI" where processing occurs locally on devices rather than in the cloud. Qualcomm's Hexagon NPU leads the market in power-efficient edge computing, allowing the company to capitalize on the rising demand for private and instantaneous AI interactions across phones, PCs, and cars.

Expansion into Data Center and Infrastructure

Qualcomm is diversifying into the data center market with custom AI accelerators on track for initial shipments later in 2026. This strategy targets the growing need for energy-efficient computing in gigawatt-scale facilities, opening a massive new total addressable market beyond consumer electronics.