The One Number Qualcomm Stock Investors Should Watch

Qualcomm (QCOM) sells chips for automobiles and industrial machines in addition to mobile phones, and this broader business portfolio may be exactly what buyers are betting on. Its revenue fell 4.0% year over year in fiscal Q3 2026. Yet the stock returned 27.5% over the past six months, against 8.1% for the S&P 500. That gap needs explaining. So how big is Qualcomm's business outside phones?

Qualcomm's Chips Outside Phones Grew 28% In Fiscal Q3

Qualcomm recorded about $3.4 billion from automotive and connected-device chips during fiscal Q3 2026, compared to $5.1 billion from phone chips. Automotive chips reached a record $1.6 billion for the quarter. That figure represents a 61% increase from a year earlier, and management expects about 60% growth again in fiscal Q4. Connected-device chips generated $1.8 billion, up 9%, with growth coming from industrial networking and robotics.

Can Qualcomm's Other Chips Make Up For Apple?

Management maintains that these alternative chips can bridge the gap within a year. Apple remains the primary concern: during the fiscal Q3 2026 earnings call in July, management noted that Qualcomm's share of the then-upcoming iPhone launch would be materially lower than its earlier estimate of 20%. They also cautioned that Apple revenue would step down faster starting in fiscal Q4. In contrast, management expects growth outside phones to accelerate to more than 60% in fiscal 2027, up from 24% in fiscal 2026. The company projects that the extra sales from this growth in fiscal 2027 will equal all of Qualcomm's Apple product revenue from fiscal 2026.

Management also raised its target for sales outside phones to $40 billion by fiscal 2029, up from $22 billion. This revised figure is close to the $44.1 billion Qualcomm reported in total revenue over the four quarters ended June 28, 2026. These targets remain forecasts rather than realized results, and management currently expects the smartphone market to shrink by a low-teens percentage in 2026 from 2025. Yet even after a six-month rally, the stock trades at 19.6 times earnings, compared to 22.9 for the S&P 500.

How Much Of Qualcomm's Target Is Still A Forecast?

About $15 billion of the $40 billion target for fiscal 2029 consists of data center revenue. This is a market Qualcomm is only starting to enter. Management stated the company's first two custom chip deals will produce revenue in the December quarter, and it expects data center revenue of $5 billion in fiscal 2027. Furthermore, Qualcomm announced a collaboration in September with Amazon on several generations of custom chips for Amazon's AI data centers. Therefore, more than a third of the long-term target is slated to come from a business whose first custom chip sales are still to be reported.

Costs present a second risk. Management noted that higher input costs, including memory and wafer prices, are putting short-term pressure on gross margins for its chips, and the company plans price increases in the double digits.

Qualcomm's business outside phones is the segment currently generating growth. Revenue from chips outside phones, which grew 28% in fiscal Q3 2026, is the critical number to watch when the company reports on or around November 4, 2026.

How To Act On QCOM?

Not necessarily on Qualcomm alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from Qualcomm's own industry that have beaten it. Over the five years to October 2026, Intel stock rose 79% and Analog Devices stock rose 150%, while Qualcomm stock rose 47%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.