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Qualcomm Reports Q3 Revenue Drop as Non-Handset Sales and AI Deals Drive Long-Term Targets

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QCOM$175.50 −0.29%

QUALCOMM Incorporated (NASDAQ:QCOM) reported third-quarter revenue of $9.9 billion, representing a 4% decline compared to the previous year. The drop was largely driven by a 20% slide in handset chip sales to $5.1 billion. However, automotive chip revenue surged 61% to $1.6 billion, helping offset weakness in the mobile market. The chipmaker also unveiled its new Snapdragon 8 Elite Extreme Gen 6 and 8 Elite Gen 6 processors at the India Mobile Congress 2026, with upcoming device launches planned by Xiaomi, Motorola, and iQOO.

To diversify beyond mobile phones, the company reaffirmed its goal of reaching $40 billion in non-handset revenue by fiscal year 2029. Boosting this strategy is a new multiyear agreement to supply Dragonfly C1000 data-center CPUs to Meta, with revenue from two major hyperscale customers expected to begin in late 2026 and volume production starting in the second half of 2028. Chief Executive Officer Cristiano Amon noted that major artificial intelligence firms are aiming to run models with up to 100 billion parameters directly on smartphones by 2028.

Investors should monitor ongoing regulatory and legal challenges. The firm faces a Federal Trade Commission review under the Hart-Scott-Rodino Act regarding an undisclosed transaction, creating near-term policy uncertainty. Meanwhile, a Delaware legal trial continues with Arm, which is also expanding into AI and data-center chips to compete directly against its long-time partners. Shares of the company closed down 0.29% at $175.5.

Key points

  • QUALCOMM Incorporated reported Q3 revenue of $9.9 billion, down 4% year-over-year, as a 20% decline in handset chip sales outweighed a 61% rise in automotive revenue.
  • The company reaffirmed its target to generate $40 billion in non-handset revenue by fiscal year 2029.
  • A multiyear deal will see Qualcomm supply Meta with Dragonfly C1000 data-center CPUs, with volume production set for H2 2028.
  • The chipmaker unveiled its Snapdragon 8 Elite Gen 6 series processors at India Mobile Congress 2026 for upcoming devices from Xiaomi, Motorola, and iQOO.
  • Qualcomm faces regulatory scrutiny under an FTC review alongside ongoing legal proceedings and growing market competition from Arm.

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Questions and answers

What were Qualcomm's Q3 revenue results?

Qualcomm reported Q3 revenue of $9.9 billion, down 4% year-over-year. Mobile handset chip sales dropped 20% to $5.1 billion, while automotive chip revenue surged 61% to $1.6 billion.

What is Qualcomm's deal with Meta?

Qualcomm secured a multiyear agreement to supply Meta with Dragonfly C1000 data-center CPUs. Volume production is scheduled for the second half of 2028, with initial revenue from two hyperscalers expected by late 2026.

What new processors did Qualcomm announce?

Qualcomm introduced the Snapdragon 8 Elite Extreme Gen 6 and Snapdragon 8 Elite Gen 6 mobile processors at the India Mobile Congress 2026, with adoption planned for devices from Xiaomi, Motorola, and iQOO.