Qualcomm’s shares dropped 10% over the past month and remain flat for the year as investors brace for disappointing third-quarter results. Analysts predict a 6.5% year-over-year revenue decline to $9.69 billion and a 19% drop in earnings per share to $2.24, reflecting mounting pressures on the chipmaker’s key smartphone market.

Revenue Headwinds and Market Expectations

Higher memory costs have dampened smartphone demand, Qualcomm’s main revenue driver. This shift has analysts approaching the Q3 report cautiously. Options traders anticipate a significant price swing of about 9.34% following the earnings announcement, slightly above the average 8.74% move seen in recent quarters.

Benchmark’s Cody Acree remains optimistic, maintaining a Buy rating with a $300 price target. He forecasts results will meet estimates, with minor gains in automotive, IoT, and licensing segments balancing handset challenges. Acree highlights that investors will likely focus more on the fourth-quarter outlook, where he projects EPS of $2.36 and revenue topping $10.2 billion, slightly beating consensus.

Mixed Analyst Views and Sector Context

Conversely, Cantor Fitzgerald’s C.J. Muse lowered his price target to $200 and stuck with a Hold rating. He attributes the stock’s recent slump more to the broader semiconductor sector downturn than Qualcomm-specific problems. Muse sees this quarter as the bottom for Qualcomm’s China Android business, expecting handset revenue to fall 22% in 2026 to $21.9 billion. Despite these challenges, he points to Qualcomm’s DragonFly Data Center product line as a rare growth bright spot and considers the stock modestly undervalued based on his 2027 earnings forecast.

Chip stocks have faced significant headwinds recently, exemplified by drops in regional markets like South Korea’s Kospi where semiconductor shares took a major hit. Qualcomm’s performance fits into this larger pattern as the industry wrestles with shifting consumer demand and cost pressures.

This material is for informational purposes and does not constitute financial advice.