Quick Read
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Apple vs Qualcomm: Apple’s decision to move away from Qualcomm’s modems is expected to slash Qualcomm’s Apple revenue by around 50% in the upcoming quarter. Apple is set to replace Qualcomm’s modems with its own silicon.
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Market Entry: Qualcomm is entering a competitive AI inference market already dominated by NVIDIA, Broadcom, Marvell, and AMD, all of which have existing custom silicon for hyperscalers.
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Analyst Reactions: Recent performance has led to 27 analysts downgrading Qualcomm’s fiscal 2027 EPS estimates, while only three have made upward revisions.
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Investment Insights: A report highlighted ten top stocks to buy now, notably excluding Apple. Interested parties can enter their email to receive the report.
Key Highlights on Qualcomm
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Qualcomm’s share in upcoming iPhone launches will be much lower than the previously estimated 20%, impacting their revenue significantly.
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The collaboration between Qualcomm and Amazon, announced in September 2026, may bring in an estimated $5 billion in revenue by fiscal 2027, but this is contingent on hitting specific milestones.
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Qualcomm is focusing on high-bandwidth compute AI accelerators and inference-oriented custom silicon, rather than training accelerators like NVIDIA.
Financial Outlook and Recommendations
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Qualcomm’s CEO stated the company anticipates initial revenue from Amazon in the December quarter and is targeting $5 billion in data center revenue by fiscal 2027, potentially reaching $15 billion by fiscal 2029.
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Investors should be cautious due to initial revenue margins being significantly lower than baseline, which could pressure overall profitability.
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Currently, Qualcomm is trading at a forward P/E of 17x, with a target price of $193.90 as projected by analysts.
Conclusion
Qualcomm faces significant challenges ahead as it adjusts to diminished revenue streams from Apple and ventures into a crowded inference market. Investors are advised to monitor quarterly data center revenue closely before making investment decisions.
