Qualcomm reported fiscal third-quarter 2026 revenue of $9.9 billion, a decline of about 4 percent year over year. The results highlight a major shift in Qualcomm’s business mix as the chipmaker expands beyond smartphones into automotive, IoT, data centers and artificial intelligence.
The QCT semiconductor business generated $8.504 billion, down 5 percent from $8.993 billion a year earlier. QCT earnings before tax were $2.192 billion, compared with $2.671 billion, while its EBT margin fell to 26 percent from 30 percent. The QTL licensing division generated $1.278 billion, down 3 percent from $1.318 billion, with EBT of $881 million and an EBT margin of 69 percent.
Smartphones remained Qualcomm’s largest business but were also the main source of weakness. QCT handset revenue fell 20 percent to $5.086 billion from $6.328 billion a year earlier. Qualcomm expects additional changes in its Apple-related business, while demand from Android smartphone makers, particularly in premium and high-tier devices, remains strategically important. Handsets accounted for roughly 60 percent of QCT revenue during the quarter.
Smartphone shipments fell 4 percent in Q2-2026 as the ongoing memory crisis disrupted supply and pushed up component costs, Runar Bjorhovde, Principal Analyst at Omdia, said.
Diversification businesses delivered much stronger growth. Automotive revenue surged 61 percent to a record $1.588 billion, from $984 million a year earlier, marking Qualcomm’s 23rd consecutive quarter of double-digit year-over-year automotive growth. IoT revenue increased 9 percent to $1.830 billion, from $1.681 billion. Combined automotive and IoT revenue therefore reached approximately $3.42 billion and grew 28 percent year over year.
Cristiano Amon, President and CEO of Qualcomm, said: “We are well positioned to execute on the vision we outlined at our recent Investor Day, with total non-handset revenues growing to $40 billion by fiscal 2029 – nearly double the target we shared in November 2024.”
“In the near term, we expect year-over-year growth in non-handset revenues, including Data Center, to accelerate from 24% in fiscal 2026 to greater than 60% in fiscal 2027 – a significant inflection point in the execution of our growth strategy,” Cristiano Amon said.
Orders and design wins point to further automotive expansion. Qualcomm recently increased its automotive design-win pipeline to $65 billion and is targeting $10 billion in annual automotive revenue by fiscal 2029. The company is also expanding relationships with major automakers, with AI-powered digital cockpit, connectivity and automated-driving platforms forming important parts of the pipeline.
AI is becoming central to Qualcomm’s investment and diversification strategy. The company completed its acquisition of Modular during the quarter, adding an open software foundation intended to support generative and agentic AI. Qualcomm is building an AI platform spanning smartphones, PCs, automotive systems, industrial IoT, robotics and data centers.
Data centers are emerging as another major business division. Qualcomm has set a target of more than $15 billion in data-center revenue by fiscal 2029 and has announced a multi-generation CPU supply agreement with Meta. Its first-generation Dragonfly C1000 CPU is planned for production beginning in the second half of 2028. Qualcomm expects AI workloads to create opportunities across cloud infrastructure as well as edge devices.
The investment plan calls for Qualcomm to generate $40 billion in non-handset revenue by fiscal 2029, approximately double its previous target. Within this, IoT revenue is targeted at more than $14 billion, comprising about $8 billion from industrial, networking and robotics and $6 billion from personal AI and compute. Automotive is targeted at $10 billion and data centers at more than $15 billion. Qualcomm expects handsets to represent only about one-third of QCT revenue by fiscal 2029, demonstrating how significantly the company’s revenue mix could change.
Qualcomm is also investing directly in the AI ecosystem. Earlier in 2026, the company committed up to $150 million through Qualcomm Ventures to an AI-focused venture fund in India targeting startups across AI, automotive, IoT, robotics and mobile.
BABURAJAN KIZHAKEDATH