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Qualcomm Inc. (NASDAQ: QCOM) stock fell more than 9% in Thursday's premarket trading as investors pulled back from semiconductor and artificial intelligence stocks despite the company's better-than-expected quarterly results.
Nasdaq futures declined 0.53%, while S&P 500 futures gained 0.15%.
Qualcomm stock closed more than 5% higher Wednesday before reversing course in Thursday's premarket trading.
Qualcomm reported fourth-quarter fiscal 2026 revenue of $10.322 billion, beating Wall Street's estimate of $10.111 billion. However, revenue declined 8% year over year.
Adjusted earnings of $2.17 per share topped analysts' estimate of $2.16.
QCT revenue reached $9.015 billion. Handset revenue fell 26% to $5.137 billion, while automotive revenue surged 89% to $1.99 billion. Internet of Things revenue rose 4% to $1.888 billion.
CEO Cristiano Amon highlighted Qualcomm's first automotive quarter approaching $2 billion. Combined automotive and IoT revenue increased 36% year over year.
For the first quarter of fiscal 2027, Qualcomm expects revenue of $10.4 billion to $11.2 billion, compared with analysts' estimate of $10.48 billion.
The company forecasts adjusted earnings of $2.15 to $2.35 per share, compared with the $2.27 consensus.
Qualcomm expects QCT revenue of $9 billion to $9.6 billion and QTL revenue of $1.3 billion to $1.5 billion.
Amon expects non-handset revenue to grow more than 60% in fiscal 2027, supported by automotive, IoT and data centers.
The company expects data-center revenue to exceed $650 million in the December quarter and reach $5 billion for fiscal 2027.
Qualcomm also targets a roughly $7 billion annualized data-center revenue run rate by the end of fiscal 2027 and $15 billion in annual revenue by fiscal 2029.
Qualcomm's multigenerational agreement with Amazon.com, Inc.'s (NASDAQ: AMZN) Amazon Web Services covers custom AI chips and optical connectivity, with potential purchases of up to $60 billion over 10 years.
Qualcomm is also working with Meta Platforms Inc. (NASDAQ: META) on its Dragonfly C1000 CPU.
Management expects two hyperscaler customers to generate most of its fiscal 2027 data-center revenue.
Qualcomm ended fiscal 2026 with automotive revenue running at an annualized $8 billion, exceeding its previous $7 billion expectation.
The company expects growing demand for agentic AI to increase computing requirements across smartphones, smart glasses and robotics.
Qualcomm also signed a multiyear agreement with Space Exploration Technologies Corp. (NASDAQ: SPCX) to support Starlink Mobile's nationwide terrestrial 5G network.
Qualcomm expects the global smartphone market to remain flat to slightly lower in calendar 2027 after a low- to mid-teens decline in 2026.
The continued decline in Apple modem-related revenue also remains a challenge. However, management expects automotive, IoT and data-center growth to offset the weakness.
CFO and COO Akash Palkhiwala said fourth-quarter QCT operating margin reached 24%, while QTL's pretax margin stood at 70%.
Qualcomm returned $2 billion to shareholders through dividends and share repurchases.
The company is raising product prices to offset higher semiconductor costs. It expects the full benefit to reach QCT gross margins in the second half of fiscal 2027.
QCOM Price Action: Qualcomm shares were down 8.66% at $158.19 during premarket trading on Thursday, according to market data.
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