Qualcomm projects significant acceleration in non-handset revenue growth, particularly in data centers, while anticipating a substantial decline in Android handset revenue for FY26. This shift in revenue mix suggests a strategic pivot and will materially impact future earnings per share.
Qualcomm's 8-K filing, though only containing 'Presentation', reveals forward-looking statements from that presentation. The company expects its non-handset revenue, including data centers, to accelerate significantly from 24% in FY26 to over 60% in FY27, indicating a strategic shift towards more diversified revenue streams. However, this positive outlook is tempered by a projected 20% decline in QCT Android handset revenue in FY26, which is expected to reduce annual EPS by over $1.50. This mixed guidance presents both opportunities and risks; long-term investors might see the non-handset growth as a positive diversification, while short-term traders will focus on the immediate EPS hit from the Android decline. The bottoming out of QCT handset revenue from China OEMs in Q3 and expected double-digit sequential growth in Q4 offers a glimmer of hope for the handset segment's recovery, but the overall Android outlook remains a significant headwind.