Qualcomm shares jump despite weak forecast, investors bet on smartphone and AI chips

Qualcomm’s latest quarter delivered a familiar split: a softer outlook for the next three months, and a market that chose to focus on what comes after that. The company said fiscal second-quarter revenue was $10.6 billion and non-GAAP earnings were $2.65 a share, but it guided fiscal third-quarter revenue to $9.2 billion to $10.0 billion and non-GAAP earnings to $2.10 to $2.30, both below Wall Street expectations. Even so, the stock rose 15% in extended trading as investors latched onto signs that Qualcomm’s smartphone business may be recovering and that its push into data-center chips is gaining traction.

That reaction says as much about Qualcomm’s place in the semiconductor cycle as it does about the numbers themselves. Smartphones still anchor the business, and the current weakness reflects a memory-chip shortage that has hit handset demand, especially among original equipment makers in China. Qualcomm said the quarter was in line with its guidance despite that challenging environment, but the market is clearly looking past the inventory drag and toward a rebound in handset orders, where Qualcomm’s licensing and chip sales remain heavily exposed.

The company also tried to show that its growth story is no longer limited to phones. Qualcomm said QCT Automotive revenue hit a quarterly record, and combined QCT Automotive and IoT revenue rose 20% from a year earlier. It completed $5.4 billion of share repurchases in the first half of fiscal 2026 and authorized another $20 billion buyback, a sign that management still sees enough cash generation to reward shareholders while funding new bets. That capital return strength helped steady sentiment even as the company’s near-term forecast came in light.

The bigger question is whether Qualcomm’s data-center and AI effort is a real second engine or still mostly future promise. Cristiano Amon said a leading hyperscaler’s custom silicon engagement was on track for initial shipments later this calendar year, and Qualcomm plans a fuller update on Data Center and Physical AI at Investor Day on June 24 in New York City. For now, investors appear willing to give the company credit for optionality: a recovering smartphone market, a stronger automotive and IoT base, and a new AI chip narrative. The challenge is proving that the opportunity is broad enough, and near enough, to justify the enthusiasm.