Qualcomm (QCOM) is facing significant headwinds in 2026, with a 25% year-to-date decline in stock price driven by a memory shortage affecting smartphone component sales and the potential end of its partnership with Apple, which is developing its own modem chips. In response, Qualcomm has authorized a $20 billion share buyback and raised its quarterly dividend from $0.89 to $0.92, signaling a commitment to returning value to shareholders despite current challenges.
The company reported record revenue of $12.3 billion in its latest fiscal quarter, with notable growth in automotive and Internet of Things (IoT) segments, indicating some success in diversifying its revenue streams. However, the outlook remains cautious, with revenue guidance for the next quarter falling short of expectations, and concerns about its long-term performance compared to the broader market.
Investors should consider Qualcomm’s current valuation, trading at 12 times forward earnings, as a potential opportunity, but may want to wait for clearer signs of recovery in its core smartphone business and further growth in automotive and IoT before making significant investments.
Source: fool.com