Qualcomm Q3 earnings to highlight AI's impact on smartphone market, data center plans
Qualcomm will report its third quarter earnings, giving investors a closer look at the impact the global memory shortage is having on smartphone sales and the status of the company's upcoming data center segment.
Intelligence analysis by Llama
Qualcomm's Q3 earnings will highlight the impact of the global memory shortage on smartphone sales and the company's expansion into the AI data center space.
Qualcomm is a company that makes chips for smartphones. Because of a shortage of memory chips, smartphone sales are going down. Qualcomm is trying to make more money by selling chips to data centers, which use a lot of computers to do things like artificial intelligence.
Analysis
A $60B Vote of Confidence
Qualcomm's Q3 earnings will provide a closer look at the impact of the global memory shortage on smartphone sales and the company's expansion into the AI data center space. The company is working to diversify its business to reduce its dependence on its handset business, which has slowed over the years. With smartphone makers increasing prices to offset the rising cost of memory and storage chips caused by the global AI buildout, the handset market is looking rough.
Why Cursor?
Qualcomm is expanding into the AI data center space, with a focus on providing data center offerings and servers, including an AI accelerator, CPU, memory, and rackscale server. The company expects its data center products to generate $5 billion in revenue in fiscal 2027 and has doubled its non-handset sales projections for its fiscal 2029 to $40 billion.
The Road Ahead
The broader decline in smartphone sales is expected to hit the company sooner than that. According to CounterPoint Research, Q2 global smartphone shipments fell 11% year-over-year, marking the industry's worst second quarter in 13 years. Qualcomm's CMDA Technologies (QCT) segment revenue, which includes smartphone, internet of things, and automotive sales, is expected to decline 8% year over year to $8.2 billion. Handset sales in particular are projected to fall roughly 21% year over year to $4.9 billion.
Key points
- Qualcomm will report its Q3 earnings, providing insight into the impact of the global memory shortage on smartphone sales.
- The company is expanding into the AI data center space, with a focus on providing data center offerings and servers.
- Qualcomm expects its data center products to generate $5 billion in revenue in fiscal 2027.
- The company has doubled its non-handset sales projections for its fiscal 2029 to $40 billion.
If Qualcomm's data center products are successful, the company could see a significant increase in revenue and help to offset the decline in smartphone sales.
If the global memory shortage continues, Qualcomm's smartphone sales could decline further, potentially impacting the company's revenue and profitability.