Qualcomm Faces Challenges in Handset Business Amid AI and Automotive Growth
Qualcomm Inc. (NASDAQ: QCOM) is experiencing pressure on its handset business due to lower OEM build plans, rising memory costs, and Apple's shift toward using its own modems. Despite these challenges, the company’s automotive segment has seen significant growth—revenue increased by 61% year-over-year in the latest quarter—and Qualcomm raised its fiscal 2029 non-handset revenue target to $40 billion. The firm is also pushing into AI and data centers as a way to offset declining smartphone demand. While it may not be at the forefront of cloud-based AI, Qualcomm plays an essential role by enabling on-device AI processing in Android phones through its Snapdragon processors. However, recent earnings have been underwhelming with sales down 4% year-over-year for Q3 2026 and shares falling about 5% YTD. Investors remain cautious but see potential upside if Qualcomm can successfully pivot toward automotive technologies and AI-driven solutions outside of smartphones.
Topics: AI automotive growth handset business Qualcomm revenue target