Qualcomm Inc

Strong Q3 performance despite industry headwinds - Qualcomm delivered $9.9B revenue (top end of guidance) and non-GAAP EPS of $2.21. - QCT revenue: $8.5B (top end of guidance), with EBT margin 26% (in line). - QTL/licensing: $1.3B (EBT margin 69% in line). - Returned $2.3B to stockholders in the quarter ($1.4B buybacks + $937M dividends).

Near-term outlook: revenue + EPS range, margins pressured then expected to normalize - Q4 guidance: $9.7B–$10.5B revenue and non-GAAP EPS $2.05–$2.25. - QCT guidance: revenue $8.4B–$9.0B, with EBT margins 23%–25% (handset mix + cost pressure remain key). - Key negative/challenge: “unprecedented memory prices,” higher manufacturing/input costs, and supply constraints are causing short-term pressure on QCT gross margins (expected slightly below historical range in the short term). - Expectation (good): Qualcomm is taking pricing actions (broad-based; “double-digit” magnitude referenced) and expects gross margins to realign toward its operating model over the next couple of quarters as price effects flow through; however, data center custom-chip mix is expected to be dilutive by ~1.5%–2% to weighted-average QCT gross margin.

Handsets: bottoming in China + Apple share/impact bigger than previously expected - Management estimates Chinese OEM handset revenues hit a bottom in Q3 and should return to double-digit sequential growth in Q4. - Apple supply constraints + lower expected share: Qualcomm now expects an acceleration in the step-down of Apple product revenues starting in Q4; Apple share for the upcoming iPhone launch expected to be materially lower than the prior estimate of 20%. - Surprising/important framing from management: They emphasized the market is down largely because memory bill-of-materials increases are large, so even “double-digit” price increases are relatively small vs the memory cost shock. - Investor implication: handset demand is not simply “weakness”—it’s being distorted by pricing/cost dynamics; the company expects conditions to stabilize later, with Snapdragon/agentic AI positioning enabling handset recovery over time.