What Is The Case For Waiting On Qualcomm Stock?

Qualcomm (QCOM) stock is up 46% over six months. It still trades about 26% below its high of the past year. At 21 times earnings, about the market’s level, the price appears to assume Qualcomm keeps growing as Apple sales shrink. Qualcomm plans to fill that gap with car and data center chips, and is raising prices as memory costs climb. Both plans are under way. So is there a case for waiting before you buy Qualcomm?

The Case For Waiting: Qualcomm’s Margin Has Fallen

Yes, there is one: Qualcomm’s operating margin has fallen over the past year. It was 23.3% over the past twelve months, down from 28% a year earlier. Operating margin is the share of sales left after running costs. Qualcomm’s is now at the bottom of its five-year range.

The stock costs 4.4 times sales, near the middle of its ten-year range of 2.9 to 6.5 times. So you pay a middle-of-range price for sales that earn at the bottom of their five-year margin range.

On the fiscal Q3 2026 call, management pointed to unprecedented memory prices and higher input costs. Management said they are putting short-term pressure on its chip gross margins. Qualcomm is raising its chip prices by double digits in response. Management expects the benefit over the next couple of quarters. Prices change only gradually because of existing contracts. Management also said its first data center revenue will be a drag of 1.5% to 2% on the chip business’s gross margin.

For fiscal Q4 2026, management guided the chip business’s pre-tax margin to 23% to 25%. The chip business earned a 26% pre-tax margin in fiscal Q3. So management guided the chip margin lower for fiscal Q4. Results are still pending, and higher prices feed in gradually. Qualcomm has to make that repair while its sales at Apple shrink.

Is Qualcomm Replacing Its Lost Apple Sales?

Partly. Car chip sales hit a record $1.6 billion in fiscal Q3 2026, up 61% from a year earlier. Total revenue still fell 4% from a year earlier. Management said rising memory costs across the smartphone market hurt its phone chip sales. Management also said Apple sales would fall faster starting in fiscal Q4 2026.

For fiscal Q4 2026, Qualcomm guided revenue of $9.7 billion to $10.5 billion. Analysts expect about $10.3 billion, in the upper half of that range. So the price appears to assume a result in the upper half of the guide, not a beat above it.

Management expects growth outside phones in fiscal 2027 to replace all of Qualcomm’s fiscal 2026 Apple product revenue. Qualcomm’s fiscal Q4 report will cover the first quarter of that faster Apple decline.

When Will Qualcomm’s Fiscal Q4 Report Show Its Margins?

Qualcomm is expected to report fiscal Q4 2026 results on or around November 3, 2026. That report is the first chance to see the chip margin after the price increases began.

Qualcomm stock has moved hard after its recent reports, in both directions. It rose 13.5% in the two trading days after its April 29, 2026 report. After each of its other five recent reports, it fell between 4.9% and 7.8% over the same two trading days. In market sell-offs it has fallen further still. It fell 28% in the February to June 2025 tariff sell-off, against 19% for the S&P 500.

Right now, Qualcomm’s car sales are growing fast, but its margins have not turned. If the chip business’s pre-tax margin comes in below 23% in that report, it will have missed management’s own range. Then buying now is early. If that margin holds at fiscal Q3’s 26%, above the top of the range, the chip margin will have stopped falling. With revenue near the $10.3 billion analysts expect, the case for waiting would be gone by early November.

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