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QUALCOMM: QUALCOMM's Q1 FY2026 Earnings: A Strong Performance Amidst Memory Constraints

QUALCOMM Incorporated reported record revenues of $12.3 billion and non-GAAP earnings per share of $3.50 for the first quarter of fiscal 2026. The company's QCT segment delivered record revenues of $10.6 billion, driven by strength in flagship handsets, automotive, and IoT. The licensing business revenues were $1.6 billion. The actual EPS of $3.50 beat estimates of $3.39, indicating a strong performance. With a P/E Ratio of 29.45 and an EV/EBITDA of 11.56, the market seems to have priced in a certain level of growth, but the company's ability to navigate the memory shortage and drive diversification priorities will be crucial.

QCOM

USD 136.3

-8.46%

A-Score: 5.5/10

Publication date: February 4, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Record Revenues: Achieved $12.3 billion in Q1 FY2026, with non-GAAP EPS of $3.50.
  • QCT Segment Leadership: Generated $10.6 billion in revenue, driven by flagship handsets, automotive, and IoT growth.
  • Memory Industry Constraints: Near-term handset demand constrained by 50-70% DRAM supply shortfall, impacting Q2 guidance ($10.2–11 billion revenue).
  • Shareholder Returns: Returned $3.6 billion to stockholders via $2.6 billion in buybacks and $949 million in dividends.
  • Data Center Growth: Aiming for multibillion-dollar revenue by 2027, collaborating with hyperscalers on AI-native solutions.

Segment Performance

The QCT segment was the main driver of the company's revenue growth, with a 31% year-over-year increase in handset revenues. The automotive and IoT segments also showed significant growth, driven by the company's design wins and the launch of new cars. Cristiano Amon, President and CEO, highlighted the company's progress in various areas, including the expansion of premium and high-tier smartphone segments and the traction of Snapdragon platforms.

Memory Constraints and Outlook

The company expects the handset industry to be constrained by memory availability and pricing, particularly DRAM, in the coming quarters. Akash Palkhiwala, CFO, noted that the fundamentals of the handset business remain favorable, but the near-term uncertainty in memory supply and pricing is driving caution among handset OEMs. The company guided revenues of $10.2 billion to $11 billion for the second fiscal quarter, with QCT revenues expected to be $8.8 billion to $9.4 billion.

Data Center and AI Business

The company's data center business is progressing well, with Qualcomm working with leading hyperscalers, cloud service providers, and other global partners to develop specialized and power-efficient AI solutions. The company expects the data center to be a multibillion-dollar revenue opportunity in a couple of years. The focus on inference, particularly disaggregated inference, and decode applications is expected to drive growth in this segment.

Valuation and Estimates

With a P/S Ratio of 3.6 and an ROE of 21.51%, the company's valuation seems reasonable. Analysts estimate next year's revenue growth at 1.0%, which may be conservative given the company's diversification priorities and growth prospects in the data center and AI businesses. The company's ability to execute on its roadmap and navigate the memory shortage will be crucial in driving future growth.

QUALCOMM's A-Score