Qualcomm Was Ready for Its Revival Tour… But The Suits Won’t Stop Staring at the Apple Exit Sign

Welp, the resurgence Qualcomm’s been chasing all year? Yeah… that’s gonna have to sit on the bench for at least one more quarter (and if we’re being honest, maybe forever). Investors took one glance at the earnings report, muttered “not good enough,” and chucked the stock into the sun (or more likely, rotated it into another 40x P/E Nvidia play, because everyone’s allergic to value now). And that’s despite Qualcomm actually putting up decent numbers… not “Wingstop just opened 129 new stores” levels of excitement, but solid nonetheless.

So what gives? Why does a company beat earnings, raise guidance, post 10% revenue growth, and still get treated like the entire executive team pulled an Enron? Two words: Apple exit. (aka the breakup that everyone saw coming, but it still hurts when they finally move out and take the couch). That said, before we get to that, let's start with what Qualcomm got right…

On paper, Qualcomm didn’t fumble the bag at all. For starters, revenue came in at $10.37 billion (up 10% from a year ago) and earnings per share hit $2.77, beating expectations by a few cents. They even threw in some upbeat Q4 guidance: $10.7 billion in revenue and $2.85 in EPS at the midpoint, both slightly ahead of what Wall Street had penciled in (not that it mattered).

(Source: CNBC)

CEO Cristiano Amon was doing everything he could to convince shareholders to be excited. He pointed to strong growth in their IoT division (up 24%), more traction in automotive chips (up 21%), and even bragged that non-Apple handset revenue is up 15% this year. And they’re making chips for Meta’s Ray-Ban smartglasses… the ones we all continue to hear hype about but don’t really know how they add any value whatsoever to our lives (we already have iPhones and Apple watches). So yeah, on paper? Not bad.

But this comes down to the giant grey cloud hanging over everything… and that’s Apple. Here’s the reality: Qualcomm’s days as the modem plug for iPhones are numbered. Apple already has its own in-house modem in the budget iPhone 16e, and plans to rip the rest of Qualcomm’s chips out of future models. It’s not a matter of if… it’s when.

And Qualcomm knows it. They've been prepping investors for the heartbreak, trying to spin the narrative with, “Well, our other customers still love us.” (Cool, but they don’t bring in $7 billion a year, do they?) So essentially, no matter how good Qualcomm’s quarter looks, the market’s focused on the revenue that’s eventually getting stripped away. It's like showing up to Thanksgiving dinner with a gourmet side dish after announcing you’re quitting your six-figure job next month… no one’s asking about the stuffing. They’re asking what you’re gonna do when the checks stop coming.

To Qualcomm’s credit, they are trying to keep working hard. They’ve got automotive partnerships humming. IoT is growing nicely. And they’re supposedly deep in talks with hyperscalers to supply AI chips for data centers… with Amon teasing that revenues could show up by 2028 (which in tech years isn’t actually too bad). They’re even name-dropping Zuck now, saying Meta’s vision for “personal superintelligence” will be powered by Qualcomm. (In other words: “Look, we’re cool too, okay?!”)

But again, this all comes down to scale. Those businesses just aren’t large enough (yet) to cover for the impending Apple hole in the P&L. And when you’re getting priced at 13x forward earnings, you don’t get the luxury of “trust us, it’ll pay off in a few years.”

So if you’re wondering, that’s why the stock continues to get smoked despite solid earnings reports. Because Wall Street doesn’t care about guidance beats or glasses with AI whispering sweet nothings into your ears. They care that your biggest, most profitable customer is slowly kicking you to the curb… and the replacement gigs haven’t proven they can pay the rent.

That’s the Qualcomm dilemma in a nutshell: solid execution, improving fundamentals, and a future strategy that actually makes sense… but none of it’s enough to outshine the Apple-shaped hole everyone sees coming. Until Amon can plug that gap with something real (and profitable), Qualcomm’s gonna keep delivering decent quarters… and getting punished like they just missed earnings by 20%.

At the time of publishing this article, Stocks.News holds positions in Apple and Meta as mentioned in the article.