Qualcomm (QCOM) stock jumped over 16% in after‑hours trading on April 29, after initially falling more than 6% following the release of its Q2 results that beat expectations. The chipmaker’s rally was driven by strong automotive growth, new data center wins, and optimism about a smartphone rebound in China. This helped offset weaker-than-expected revenue and earnings guidance.
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The company posted adjusted earnings of $2.65 per share, topping the $2.56 consensus. Revenue came in at $10.6 billion, slightly above the estimate of $10.58 billion, but was down 3% from the same quarter last year.
Key Positive Factors in QCOM’s Q2 Report
Among the positive drivers, the company delivered record Automotive revenue of $1.33 billion, up 38% from last year, underscoring the strength of its digital cockpit and connectivity platforms. Its IoT segment also returned to growth, rising 9% year‑over‑year. Together, these gains reassured investors that Qualcomm is steadily reducing its reliance on handset revenue, which was down 13% year-over-year.
Moreover, Qualcomm revealed that a major hyperscaler (data center operator) will begin using its chips later this year, indicating progress in the data center market, an area where the company has been working to establish a foothold.
Another market-moving update was Qualcomm’s outlook on China. Management said the Chinese smartphone market, its largest, is expected to bottom in the third quarter and then rebound in the following quarter. After years of volatility in the region, this comment gave investors renewed confidence in Qualcomm’s handset recovery trajectory.
Impressive Capital Deployment Activities
Alongside earnings, Qualcomm approved a quarterly dividend increase, raising its payout to $0.92 from $0.89 per share. The higher dividend applies to all quarterly payments made after March 26.
Further, Qualcomm said it completed $5.4 billion in share repurchases during the first half of Fiscal 2026 and authorized an additional $20 billion buyback program. This new approval comes on top of the company’s existing repurchase plan from November 2024, which still had roughly $2.1 billion remaining.
Overall, the expanded buyback capacity and higher dividend signal Qualcomm’s confidence in its balance sheet, cash flow, and long‑term earnings outlook.
Is QCOM a Good Buy Now?
Turning to Wall Street, analysts have a Hold consensus rating on Qualcomm stock based on eight Buys, 17 Holds, and four Sells assigned in the past three months. Further, the average QCOM price target of $152.28 per share implies 2.38% downside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
