Qualcomm Q4: data centre sales hit 50 million, handset chips fall 26%

Qualcomm, the US chip designer best known for processors used in smartphones, reported revenue of about $10.4 billion for its fiscal fourth quarter of 2026 on Wednesday, 4 November 2026, with adjusted earnings of $2.17 a share, slightly ahead of analysts' expectations. Revenue from data-centre products, a business the company is building to compete in artificial intelligence (AI) computing, reached about $650 million in the quarter, and automotive chip revenue rose 89% to about $2 billion. Sales of handset chips fell 26%, as a shortage of memory chips weighed on smartphone production, according to reports of the results. Qualcomm's shares fell about 7% after its outlook for the December quarter disappointed investors.

Qualcomm's results show how quickly the AI boom is reshaping the chip industry. For decades the company's fortunes rose and fell with smartphones. Now it is betting heavily on data centres, the large computer farms that train and run AI systems, and on cars, which need ever more computing for driver assistance and infotainment. In this quarter, the two growth businesses moved in the right direction while the traditional phone business shrank.

The memory shortage is the other story in the numbers. AI data centres are absorbing a large share of the world's memory chip production, which leaves less for phones and PCs and pushes up their cost. When phone makers cannot get enough memory, they build fewer phones and order fewer processors, which is what hit Qualcomm's handset sales. This links to what consumers pay: when memory is scarce, the cost of building phones and computers rises, and buyers, including in India, can face higher prices or fewer choices.

For businesses, Qualcomm's targets are a statement of intent rather than a guarantee. Going from about $650 million a quarter to $5 billion for a full year means the data-centre business must grow sharply through fiscal 2027. The Amazon collaboration gives the plan a large customer, but Qualcomm faces established competitors in AI chips, and the market's 7% fall in the share price shows investors want proof that growth in new areas can offset weakness in phones.

Peepals calculation: Data-centre revenue of about $650 million was about 6% of the quarter's roughly $10.4 billion revenue (0.65 ÷ 10.44 ≈ 0.06), while automotive's roughly $2 billion was about 19% (2 ÷ 10.44 ≈ 0.19). To reach the $5 billion data-centre target for fiscal 2027, Qualcomm would need to average about $1.25 billion a quarter (5 ÷ 4), nearly double the latest quarter. Our calculation from the reported figures.

Short-term: Qualcomm's guidance signals continued pressure on smartphone chip sales while the memory shortage lasts. Phone makers that rely on its processors may face tight supply and higher costs.

Long-term: If the data-centre and automotive businesses grow as planned, Qualcomm would be far less dependent on smartphones by the end of the decade, changing its competitive position in the chip industry.

Who is affected: Qualcomm's shareholders and customers; smartphone makers and buyers facing higher memory costs; carmakers using its automotive chips; and cloud companies, such as Amazon, building AI data centres.

What to watch next: Qualcomm's December-quarter results against its guidance of $10.4 billion to $11.2 billion in revenue.

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