Has Qualcomm Stock Become A Different Bet

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Qualcomm (QCOM) stock trades at 4.3 times its sales over the past twelve months, compared with 3.2 for the S&P 500. That premium suggests buyers expect growth. Shareholders paying it need to know what they are buying, and the company's priorities have changed. On its fiscal Q4 2025 call, management emphasized growth in chip sales to customers other than Apple. Now it emphasizes something else. So what is it?

What Is Qualcomm Emphasizing Now?

Management now emphasizes chip sales outside phones, specifically chips for cars, connected devices and data centers. On the fiscal Q4 2026 call on November 4, 2026, management said these sales will grow by more than 60% from a year earlier in fiscal 2027, starting in the December quarter. It expects them to make up more than half of chip revenue that year.

A year earlier, management highlighted a different figure. Management said on the fiscal Q4 2025 call that chip sales to everyone but Apple grew 18% from a year earlier, after pointing to growth in those sales on the call before. That figure showed how the chip business, 86.6% of company revenue in fiscal 2025, was doing apart from Apple. On the latest call, management said its Apple product revenue continues to ramp down. Management no longer emphasizes the non-Apple figure: its focus has moved from customers other than Apple to businesses other than phones.

Qualcomm's Phone Chips Still Outsell Cars And Devices

In the September quarter of fiscal 2026, phone chips brought in $5.1 billion. That was more than chips for cars and connected devices brought in combined. Automotive chips recorded their first $2 billion quarter, up 89% from a year earlier. Chips for connected devices, which Qualcomm calls IoT, brought in $1.9 billion, up 4%.

Together, car and device chip sales grew 36% from a year earlier, with automotive growing far faster than IoT. Data centers are the newest part: management is targeting $5 billion of data center revenue in fiscal 2027, most of it from custom AI chips for two large cloud customers.

Is Qualcomm's New Focus Good News For Holders?

Partly. The growth management now talks up already shows in the automotive results, but phone chips, still the larger business, are expected to shrink this quarter. Management forecasts phone chip revenue to fall by a mid-single-digit percentage from the September quarter to the December quarter. It expects growth in Android revenue, while Apple product revenue keeps ramping down. Pointing the other way, management also said its baseline share at Samsung is now above 70%, against 50% in the past.

The 60% forecast for sales outside phones also needs care. It counts data center sales, which sat outside the chip segment in fiscal 2026 and moved into it in fiscal 2027. So part of that 60% looks set to come from data centers, where custom chips only began shipping in October.

Qualcomm's revenue fell 2.6% over the past twelve months. If phone chip sales keep falling, growth outside phones has to cover that loss before total sales can grow again, and buyers paying a premium on sales are paying for that growth now. Management expects sales outside phones to grow enough in fiscal 2027 to more than offset the decline in Apple product revenue.

Led by automotive chips, growth outside phones has results behind it. Whether phone chips hold up as Apple product revenue ramps down is still open. Qualcomm's phone chip revenue for the December quarter, due when the company reports in February 2027, is the number to watch.

Does This Mean You Should Act On QCOM?

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