Qualcomm Beats Q4 Estimates and Lands SpaceX 5G Deal but Stock Falls on Weak Profit Outlook

Qualcomm reported fiscal fourth-quarter adjusted revenue of $10.44 billion, well above the $10.12 billion analyst estimate, and adjusted earnings per share of $2.17, a narrow beat on the $2.16 consensus. GAAP revenue came in at $10.32 billion, down 8% year over year, as a severe handset slump overshadowed strong gains in automotive and emerging data center businesses. Shares fell roughly 5% in after-hours trading as investors focused on guidance that disappointed on the earnings line.

The handset segment, still Qualcomm's largest revenue source, generated $5.14 billion, a 26% year-over-year decline and a miss against the $5.22 billion estimate. Automotive chips surged 89% year over year to $1.99 billion, well above the $1.71 billion estimate, while IoT revenue grew 4% to $1.89 billion. The company is also raising prices across its product range to reflect higher semiconductor input costs, with the full margin benefit expected in the second half of fiscal 2027.

For the first fiscal quarter of 2027, Qualcomm guided revenue of $10.4 billion to $11.2 billion, with the midpoint above the $10.55 billion estimate, but non-GAAP EPS guidance of $2.15 to $2.35 came in with a midpoint slightly below the $2.32 consensus. Management said data center revenue will exceed $650 million in Q1, rising every quarter, with a target of a $7 billion annualized run-rate by the end of fiscal 2027. The company reiterated its full-year fiscal 2027 data center revenue target of $5 billion and projected non-handset revenues would grow more than 60% year over year.

Earlier in the day, Qualcomm announced a multiyear agreement with SpaceX under which its Dragonwing QRU100 and QDU100 platforms will supply the chips and commercial-grade Layer 1 software for Starlink Mobile's planned U.S. terrestrial 5G network. Deployment is set to begin in 2027 across tens of thousands of cell sites using 64-transmit, 64-receive Massive MIMO technology. The deal positions SpaceX as a potential fourth major U.S. wireless carrier competing with Verizon, AT&T, and T-Mobile, and Qualcomm described it as laying the groundwork for future AI-native 6G infrastructure. Mobile Experts analyst Joe Madden estimated SpaceX's overall nationwide wireless expansion, including spectrum acquisitions, could cost at least $100 billion, though Qualcomm's contract value was not disclosed. The stock rose about 1% in premarket trading on the news before reversing after the earnings guidance.

On the earnings call, CEO Cristiano Amon confirmed that custom AI accelerators began shipping in October, that AWS connectivity is ramping this month, and that the Dragonfly C1000 CPU remains on track for delivery to Meta as scheduled. Qualcomm also announced a multi-generational product collaboration with Amazon for AI data centers. The company returned $1.01 billion through share buybacks and paid a $0.92 per share dividend in the quarter.