Qualcomm advances diversification as memory costs pressure margins

Transcript intelligence

What changed

Compared with the prior quarter, guidance sentiment moved from maintained to raised. Qualcomm reported Q3 revenue and non-GAAP EPS at the top of guidance, raised its FY26 automotive outlook to approximately $7 billion, completed the Modular acquisition, and advanced its data-center roadmap. At the same time, memory-cost inflation and a reduced Apple share became more prominent constraints.

Guidance delta

Guidance sentiment changed from maintained in the prior quarter to raised in Q3 FY2026, with Q3 revenue and non-GAAP EPS at the top of guidance and the FY26 automotive outlook raised to approximately $7 billion.

Key takeaways

• Q3 FY2026 revenue was $9.9 billion and non-GAAP EPS was $2.21, both at the top of guidance.
• Non-handset businesses are accelerating, with management targeting $40 billion of revenue by FY29.
• Automotive reached record quarterly revenue of $1.6 billion, and the FY26 automotive outlook was raised to approximately $7 billion.
• Data-center initiatives are advancing, with custom-silicon revenue expected to begin in the December quarter and High-Bandwidth Compute targeted for a mid-2027 launch.
• Memory-cost inflation is pressuring margins; management described double-digit price increases as a response.

Management priorities

• Scale non-handset businesses across data center, automotive, IoT, and industrial markets.
• Ramp custom silicon and AI accelerator revenue beginning in the December quarter.
• Advance High-Bandwidth Compute toward a mid-2027 first solution and server-class CPUs in FY28.
• Integrate Modular's software stack and broaden the Snapdragon ecosystem through stated partnerships.
• Use pricing actions to offset memory-cost inflation and restore gross margins.