Wireless chipmaker Qualcomm (NASDAQ: QCOM) reported revenue ahead of Wall Street’s expectations in Q2 CY2026, but sales fell by 4% year on year to $9.95 billion. Guidance for next quarter’s revenue was better than expected at $10.1 billion at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $2.21 per share was in line with analysts’ consensus estimates.
Is now the time to buy Qualcomm? Find out by accessing our full research report, it’s free.
Qualcomm (QCOM) Q2 CY2026 Highlights:
- Revenue: $9.95 billion vs analyst estimates of $9.66 billion (4% year-on-year decline, 3% beat)
- Adjusted EPS: $2.21 vs analyst expectations of $2.22 (in line)
- Adjusted Operating Income: $2.78 billion vs analyst estimates of $2.74 billion (27.9% margin, 1.2% beat)
- Revenue Guidance for Q3 CY2026 is $10.1 billion at the midpoint, above analyst estimates of $10 billion
- Adjusted EPS guidance for Q3 CY2026 is $2.15 at the midpoint, below analyst estimates of $2.38
- Operating Margin: 16.3%, down from 26.6% in the same quarter last year
- Free Cash Flow Margin: 5%, down from 24.9% in the same quarter last year
- Inventory Days Outstanding: 163, up from 146 in the previous quarter
- Market Capitalization: $171.7 billion
Company Overview
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ: QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Qualcomm’s sales grew at a decent 7.5% compounded annual growth rate over the last five years. Its growth was slightly above the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Qualcomm’s annualized revenue growth of 8.6% over the last two years is above its five-year trend, which is encouraging. 
This quarter, Qualcomm’s revenue fell by 4% year on year to $9.95 billion but beat Wall Street’s estimates by 3%. Despite the beat, the drop in sales could mean that the current downcycle is deepening. Company management is currently guiding for a 10.4% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to decline by 3.5% over the next 12 months, a deceleration versus the last two years. This projection doesn’t excite us and suggests its products and services will see some demand headwinds.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Qualcomm’s DIO came in at 163, which is 31 days above its five-year average, suggesting that the company’s inventory has grown to higher levels than we’ve seen in the past.
Key Takeaways from Qualcomm’s Q2 Results
It was encouraging to see Qualcomm beat analysts’ revenue expectations this quarter. We were also happy its operating income narrowly outperformed Wall Street’s estimates. On the other hand, its inventory levels materially increased and its EPS was in line with Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 5.9% to $149.21 immediately after reporting.
Is Qualcomm an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
