In a surprising market reaction, Qualcomm (QCOM) shares fell by 4.2% to $166.75 on Monday, despite the company reporting earnings that exceeded Wall Street expectations. The chipmaker announced earnings per share (EPS) of $3.00, significantly above the anticipated $2.87, alongside revenue of $11.27 billion, marking a 10% increase year-over-year.
The decline in stock price occurred even after Qualcomm provided guidance for the first quarter of fiscal year 2026, projecting EPS between $3.30 and $3.50. Analysts forecast an approximate EPS of $9.39 for the entire year, yet the stock trades substantially below the consensus price target of $190.38.
A notable factor contributing to the stock”s decline was the sale of 150,000 shares by CEO Cristiano Amon, valued at around $24.8 million. This transaction represents a dramatic 50.12% reduction in Amon”s holdings, leaving him with 149,304 shares. Additionally, CFO Akash Palkhiwala sold 8,335 shares at an average price of $166.06 on October 20, reflecting an 18.57% decrease in his position.
Despite the stock”s downturn, Qualcomm announced a quarterly dividend of $0.89 per share, translating to an annualized yield of 2.1% and a payout ratio of 72.8%. The dividend is set to be paid on December 18 to shareholders recorded by December 4.
Following the earnings report, multiple analysts upgraded their price targets for Qualcomm. Susquehanna established a target of $210, while Mizuho increased its target from $185 to $200. Rosenblatt Securities maintained a buy rating with a price target of $225. Presently, the consensus rating indicates a “Moderate Buy,” with 13 analysts suggesting a buy, nine holding, and one recommending a sell.
In the realm of guidance and legal challenges, Qualcomm unveiled two new AI accelerators aimed at data center inference, with deployments slated for 2026. However, the company also faces legal hurdles, including a recent patent lawsuit and regulatory scrutiny regarding its pending $2.4 billion acquisition of UK-based Alphawave Semi.
On Monday, trading volume for Qualcomm reached 10,193,933 shares, indicating a 16% increase above the average. The stock”s 50-day moving average stands at $168.95, while the 200-day moving average is at $159.08. With a market capitalization of $178.59 billion, Qualcomm currently trades at a price-to-earnings (P/E) ratio of 16.08 and a PEG ratio of 2.59.
