Should Qualcomm Stockholders Worry About Its Shrinking Revenue?

Qualcomm (QCOM) grew revenue just 1.9% over the last twelve months, against a compound pace of about 6.2% a year over five years and 4.5% over three. The quarterly path is worse. Across the last four quarters, year-over-year growth slid from 10.0% to 5.0%, then to declines of 3.5% and 4.0%. That turn to shrinking quarterly sales is the risk to weigh.

Phones Still Bring In About Half The Sales

In fiscal Q3 2026, handset chip revenue was $5.1 billion, about half of the $9.9 billion total. The CEO says unprecedented memory prices, plus supply shortages driven by data center demand, are pulling revenue down across mobile and consumer electronics. Management puts the net effect at a 20% drop in its Android chip revenue in 2026 from 2025.

And Apple Revenue Is Exiting Faster Than Planned

Apple is the second drag. Citing its own supply constraints, Qualcomm said on its fiscal Q3 2026 call that it expects materially lower share in new iPhone launches than its prior 20% estimate. An analyst put fiscal 2026 Apple product revenue at about $7.5 billion, and management called that a fair range.

For fiscal 2027, management now sees Apple product revenue below its earlier guide of a little over $2 billion. Against $44.1 billion of total revenue over the last twelve months, the roughly $7.5 billion analyst estimate for fiscal 2026 makes Apple a big customer to shrink that quickly.

So Qualcomm Expects Growth Outside Phones To Refill The Apple Gap

Qualcomm’s answer is growth outside phones, and it is real. Automotive hit a record $1.6 billion in fiscal Q3 2026, up 61% year over year. For fiscal 2027, management expects non-handset revenue to grow more than 60%.

The catch sits in the same plan. Management expects that growth to replace total fiscal 2026 Apple product revenue, so much of that jump outside phones only fills the Apple hole rather than adding to Qualcomm’s total. Management still expects total revenue to grow in fiscal 2027, without putting a figure on it.

The newest piece is the least proven. Data center revenue, which management targets at $5 billion in fiscal 2027, starts with two custom silicon wins at global-scale hyperscalers that begin generating revenue in the December quarter. The CEO concedes investors want more proof that Qualcomm can execute as a new entrant. Management also expects that early revenue, mostly custom chips, to run well below its baseline gross margin.

The December Quarter Is The First Real Test

Qualcomm trades at about 20 times trailing earnings, well below its 10-year high of 37.5. At $176.88 the shares sit at about 71% of their 52-week high, even after a 33% gain over six months. If that gap reads to you as an opening, test it against a dip-buying screen.

So the risk is timing more than valuation. In the December quarter, management expects Apple product revenue to fall about 50% from the September quarter, but it expects Android growth and the first custom silicon revenue to leave its chip revenue slightly up from that quarter. If that plan lands on schedule, the shrinking quarters start to look like a trough. If it slips, they look more like the slowdown the multi-year rates already show.

So Can You Wait Out Qualcomm’s Shrinking Sales?

Perhaps, if you can live with a data center business just beginning and a phone market tied to memory prices. If you would rather not bet that much on one company’s timing, the Trefis High Quality Portfolio spreads the risk across quality businesses. That portfolio has a track record of outpacing the three major indices.