QCOM
QUALCOMM INC/DENasdaqValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Aug 17, 2026 · Valuation Aug 16, 2026
What drives QCOM's base case?
base-case thesisThe latest weakness is concentrated in handsets, where customer inventory and memory costs are weighing on demand. Automotive and connected-device revenue are still expanding, and Qualcomm is investing heavily to add data-center computing. This case assumes those newer businesses scale meaningfully but fall short of the company's full ambition, allowing profitability to recover without returning immediately to its recent peak.
What shapes the assumptions
Automotive revenue rose strongly year over year in Q2 FY2026
Automotive revenue
Raises revenue growth
Handset revenue declined as customers reduced build plans
Handset revenue
Lowers revenue growth
Recent quarterly profitability fell from above one-quarter of sales to below one-fifth
Profit retained from each revenue dollar
Lowers operating margin
Capital spending more than doubled in the first half of FY2026
Capital and growth investment
Raises reinvestment
Permanent favorable treatment for qualifying foreign-derived income
Long-run cash taxes
Lowers tax rate
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 24.2% a year. Over the last 5 years it grew 6.2% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 45.3% operating margin, against the 26.0% assumed here.
- How confident is this estimate?
- Robustness 56.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Base inputs from financials
source period →Base revenue (TTM)
$44.1B
Diluted shares
1,069,000,000
Net cash
$6.3B
Bear
low confidence$68.08
IV / share
-58.9% vs $165.79
- Explicit cash flows
- $21.81
- Terminal value
- $40.37
- Net cash
- $5.91
- Intrinsic value / share
- $68.08
59.3% of the value rests on the terminal value — elevated dependency.
Revenue growth0.0% → 3.0% → 5.0% → 4.0% → 3.0%medium
How derived: Starting from the recent sequence of slowing and then negative quarterly growth, the forecast assumes handset weakness persists before automotive and IoT produce only a gradual recovery.
Why this confidence: Recent reported contraction and near-term handset guidance ↑, Uncertain five-year timing of diversification revenue ↓
Evidence for
- Qualcomm said memory constraints and related price increases were causing major handset customers to reduce build plans, while its third-quarter guidance anticipated lower handset demand.[Q2 FY2026 Results]· primary
Evidence against
- Management raised its fiscal 2029 non-handset revenue target to $40 billion, including $10 billion from automotive and more than $14 billion from IoT.[2026 Investor Day]· primary
Operating margin22.0%medium
How derived: Starting from the sharp decline in quarterly profitability during fiscal 2026, the forecast allows a partial recovery but assumes continuing data-center investment and weaker handset scale prevent a return to earlier peak levels.
Why this confidence: Several quarters of reported profitability data ↑, Unknown profitability of the new data-center business ↓
Evidence for
- Qualcomm reported lower QCT earnings as a share of revenue and higher unallocated research, development, selling and administrative expenses during the first half of fiscal 2026.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- Management described its diversification plan as providing operating leverage and targeted more than $18 of non-GAAP earnings per share in fiscal 2029.[2026 Investor Day]· primary
Tax rate19.0%medium
How derived: Starting from the 0.21 federal statutory rate, the forecast recognizes FDDEI and research-credit benefits but retains a larger allowance for foreign, state and tax-law effects than the other cases.
Why this confidence: Enacted statutory and FDDEI rates ↑, History of large discrete tax adjustments ↓
Evidence for
- Qualcomm states that changes in taxable income, tax law and other factors can alter realization of its tax assets, while foreign withholding taxes and other items add to the tax provision.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- Qualcomm disclosed that qualifying foreign-derived income receives a 0.13 effective rate through fiscal 2026 and a permanent 0.14 rate beginning in fiscal 2027, supplemented by research credits.[2025 Form 10-K]· primary
Reinvestment rate24.0%low
How derived: Starting from first-half capital spending and acquisitions, the forecast assumes Qualcomm curtails expansion spending as growth disappoints but must continue funding product development and supplier capacity.
Why this confidence: Recent capital-spending and acquisition disclosures ↑, Reinvestment includes unreported future working-capital and acquisition choices ↓
Evidence for
- Qualcomm spent approximately $1.1 billion on capital expenditures and $1.2 billion on acquisitions and other investments during the first half of fiscal 2026.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- Management says it intends to continue substantial investment in automotive, IoT and data-center products even though those investments may take years to generate material returns.[Q2 FY2026 Form 10-Q]· primary
Terminal growth2.0%low
How derived: Starting from management's expectation of continued growth in connected computing, the forecast discounts that outlook for handset maturity, customer concentration and execution risk and settles below long-run nominal economic growth.
Why this confidence: Rate is below the observed long-term Treasury yield ↑, Perpetual forecast horizon ↓
Evidence for
- Qualcomm warns that smartphone concentration, vertical integration by customers and failure of new initiatives could limit revenue and profitability.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- Management expects secular opportunities beyond fiscal 2029 in data centers, robotics, driving systems, industrial AI, personal AI and 6G.[2026 Investor Day]· primary
Base
low confidence$97.75
IV / share
-41.0% vs $165.79
- Explicit cash flows
- $28.43
- Terminal value
- $63.41
- Net cash
- $5.91
- Intrinsic value / share
- $97.75
64.9% of the value rests on the terminal value — elevated dependency.
Revenue growth6.0% → 10.0% → 14.0% → 11.0% → 8.0%medium
How derived: Starting from current handset weakness but strong automotive and IoT growth, the forecast assumes a near-term recovery followed by a data-center and diversification ramp that achieves only part of management's fiscal 2029 ambition.
Why this confidence: Reported automotive and IoT growth plus explicit company targets ↑, Management targets depend on products and markets still being developed ↓
Evidence for
- In Q2 FY2026, automotive revenue increased from $959 million to $1.326 billion and IoT revenue increased from $1.581 billion to $1.726 billion year over year.[Q2 FY2026 Form 10-Q]· primary
- Management targets $40 billion of non-handset revenue in fiscal 2029, including more than $15 billion from data centers.[2026 Investor Day]· primary
Evidence against
- Handset revenue declined year over year in Q2 FY2026 as major customers reduced build plans in response to memory constraints and higher prices.[Q2 FY2026 Form 10-Q]· primary
Operating margin26.0%medium
How derived: Starting from the recent drop in profitability, the forecast assumes handset normalization, licensing income and better scale in automotive and IoT restore profitability near the middle of the company's recent range.
Why this confidence: Established licensing economics and prior quarterly profitability ↑, Uncertain spending and mix during the data-center ramp ↓
Evidence for
- Qualcomm's licensing revenue is principally royalty income from handset sales, while management expects diversification to provide operating leverage as revenue scales.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- The company increased research and development and administrative spending while warning that investments in new markets may take years to generate material returns.[Q2 FY2026 Form 10-Q]· primary
Tax rate15.0%high
How derived: Starting from the permanent 0.14 FDDEI rate expected from fiscal 2027, the forecast adds a modest amount for state, foreign and other taxes while retaining research-credit benefits.
Why this confidence: Enacted tax law and company-specific FDDEI disclosure ↑, Possible discrete and jurisdictional tax items ↓
Evidence for
- Qualcomm disclosed a permanent 0.14 effective FDDEI rate beginning in fiscal 2027 and recurring federal research and development credits.[2025 Form 10-K]· primary
Evidence against
- Foreign withholding taxes, state taxes, discrete items and potential changes in taxable income or tax law can move the consolidated rate away from the FDDEI rate.[Q2 FY2026 Form 10-Q]· primary
Reinvestment rate34.0%low
How derived: Starting from rising capital spending and multiple technology acquisitions, the forecast retains about one-third of after-tax operating profit to fund data centers, automotive, IoT and supplier commitments.
Why this confidence: Current capital spending and acquisition activity are disclosed ↑, Future acquisition and working-capital needs are discretionary ↓
Evidence for
- First-half FY2026 capital expenditures more than doubled year over year, and Qualcomm acquired Alphawave plus six other businesses to support diversification and data-center expansion.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- Qualcomm generated $7.414 billion of operating cash during the first half of FY2026, materially exceeding ordinary capital expenditures.[Q2 FY2026 Form 10-Q]· primary
Terminal growth2.5%low
How derived: Starting from Qualcomm's exposure to recurring connectivity upgrades and expanding automotive and computing uses, the forecast assumes mature nominal growth below the current long-term government-bond yield.
Why this confidence: Multiple durable end markets and connectivity standards ↑, Perpetual competitive and technology uncertainty ↓
Evidence for
- Qualcomm identifies continuing opportunities beyond fiscal 2029 across data centers, robotics, automotive systems, industrial AI, personal AI and 6G.[2026 Investor Day]· primary
Evidence against
- Qualcomm cautions that new markets may not develop as anticipated and that competitors may have stronger products, relationships or operating histories.[Q2 FY2026 Form 10-Q]· primary
Bull
low confidence$125.50
IV / share
-24.3% vs $165.79
- Explicit cash flows
- $33.88
- Terminal value
- $85.72
- Net cash
- $5.91
- Intrinsic value / share
- $125.50
68.3% of the value rests on the terminal value — elevated dependency.
bull revenue growth (avg 15%) runs well above the trailing -1% trend
Revenue growth12.0% → 19.0% → 22.0% → 14.0% → 9.0%low
How derived: Starting from management's fiscal 2029 targets, the forecast assumes handset demand rebounds while automotive, IoT and data-center products scale rapidly enough to approximately double company revenue over five years.
Why this confidence: Detailed company targets and large automotive design-win pipeline ↑, Forecast requires rapid execution in a new data-center market ↓, Five-year revenue doubling is well above the recent company trend ↓
Evidence for
- Management targets $40 billion of non-handset revenue by fiscal 2029, with $10 billion from automotive, more than $14 billion from IoT and more than $15 billion from data centers.[2026 Investor Day]· primary
- Qualcomm expanded its automotive design-win pipeline to $65 billion and acquired Alphawave to accelerate data-center connectivity and custom silicon.[2026 Investor Day]· primary
Evidence against
- Qualcomm says its investments in new markets may fail, take many years to produce returns or face competitors with more established relationships and operating histories.[Q2 FY2026 Form 10-Q]· primary
Operating margin30.0%low
How derived: Starting from the stronger profitability achieved before the fiscal 2026 decline, the forecast assumes high-value licensing, premium products and operating leverage offset the cost of scaling new businesses.
Why this confidence: Company has previously achieved comparable quarterly profitability ↑, New data-center products may initially carry lower profitability ↓
Evidence for
- Management explicitly expects operating leverage from diversification and targets more than $18 of non-GAAP earnings per share in fiscal 2029.[2026 Investor Day]· primary
Evidence against
- Qualcomm's recent profitability declined as handset revenue weakened and research, development and administrative costs increased.[Q2 FY2026 Form 10-Q]· primary
Tax rate13.0%medium
How derived: Starting from the 0.14 permanent FDDEI rate, the forecast assumes research credits and efficient use of deferred tax assets slightly more than offset other jurisdictional taxes.
Why this confidence: Enacted FDDEI rules and recurring research credits ↑, Assumption requires credits to offset taxes outside the FDDEI regime ↓
Evidence for
- Qualcomm benefits from preferential treatment of qualifying foreign-derived income, federal research credits and the expected realization of existing federal deferred tax assets.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- The permanent FDDEI rate itself rises to 0.14 in fiscal 2027, and foreign withholding and other taxes can push the total company rate above it.[2025 Form 10-K]· primary
Reinvestment rate44.0%low
How derived: Starting from Qualcomm's accelerated acquisitions and capital spending, the forecast reinvests a large share of after-tax operating profit to support the data-center, automotive, robotics and industrial-AI growth required by this case.
Why this confidence: Visible acquisitions and expanded product roadmap ↑, No company guidance for a five-year reinvestment ratio ↓
Evidence for
- Qualcomm completed the Alphawave acquisition, acquired six additional businesses and increased capital expenditures while building data-center and diversification capabilities.[Q2 FY2026 Form 10-Q]· primary
Evidence against
- Qualcomm's existing business generated operating cash well above ordinary capital expenditures, reflecting a model that does not require company-owned fabrication capacity for most production.[Q2 FY2026 Form 10-Q]· primary
Terminal growth3.0%low
How derived: Starting from the company's broad exposure to AI computing and future connectivity standards, the forecast assumes sustained mature growth while remaining below the current long-term Treasury yield.
Why this confidence: Diversified long-term markets and recurring standards transitions ↑, Perpetual growth is highly sensitive to competition and technology shifts ↓
Evidence for
- Qualcomm expects continuing opportunities after fiscal 2029 from data centers, robotics, driving systems, industrial and personal AI, and 6G.[2026 Investor Day]· primary
Evidence against
- Qualcomm identifies semiconductor cyclicality, customer concentration, vertical integration, geopolitical restrictions and rapid technological change as material long-term risks.[Q2 FY2026 Form 10-Q]· primary
Valuation robustness
reliability of the estimate, not a stock rating56 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- The reinvestment assumption is low-confidence.→ reinvestment
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q1 2025 | 17.5% | 3.84 | 58.3% | 1.12B | -0.4% |
| Q2 2025 | 16.9% | 2.1 | -29.6% | 1.12B | -1.3% |
| Q3 2025 | 10.3% | 2.35 | -0.1% | 1.1B | -3.1% |
| Q1 2026 | 5.0% | 4.09 | 6.5% | 1.08B | -3.8% |
| Q2 2026 | -3.5% | 1.79 | -14.8% | 1.07B | -3.9% |
| Q3 2026 | -4.0% | 0.46 | -80.3% | 1.07B | -2.7% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The 0.0468 input is the U.S. Treasury's 10-year par yield reported for August 12, 2026, the latest available observation before the valuation date.
The input uses the published QCOM market beta displayed with the company's Nasdaq quote on August 14, 2026.
The input uses the July 1, 2026 trailing-twelve-month implied U.S. equity risk premium, an original market-implied estimate based on index cash flows, growth and bond yields.
The input is QCOM's closing market price on August 14, 2026, the last trading day before the valuation date.
Generated 8/16/2026, 6:55:48 AM · pipeline v1.1.0