To The Moon

Qualcomm Earnings Preview: Dashing Into AI, But Can It Outrun the iPhone Clock?

Global handset chip giant $Qualcomm(QCOM)$   is set to report its F25Q4 earnings after the bell on Wednesday, November 5. The market is focused on Qualcomm's progress in its AI data center and core handset businesses, as well as its diversification efforts in Auto, IoT, and PC.

Option Market Signals

With Qualcomm set to report earnings on Wednesday, November 5th, the options market is telling a story of a dramatic, late-stage sentiment capitulation.

The most striking signal is the complete collapse of the Put/Call Ratio. Just weeks ago, traders were heavily skewed toward put options (above 1.10). In sync with the stock's sharp breakout, that sentiment has inverted. The plunge to 0.78 shows traders have been aggressively ditching downside protection and chasing the rally with new call positions. The spike in open interest confirms this is a "new money" event, not just short-covering.

However, the volatility picture is complex. The stock's recent price action has been so aggressive that its Historical Volatility (53.51%) has outrun the Implied Volatility (43.38%). This unusual configuration means that, as expensive as options may seem, they have recently failed to capture the stock's true, realized volatility.

Core Financial Indicators

~Revenue consensus for this quarter is $10.75 billion, representing a 5% increase year-over-year (YoY) and a 4% increase quarter-over-quarter (QoQ). The company's guidance cap is $11.0 billion.

~GAAP gross margin consensus for this quarter is 55.6%, flat both YoY and QoQ.

~GAAP net profit consensus for this quarter is $2.71 billion, a 7% decrease YoY but a 2% increase QoQ. The company's guidance cap is $2.67 billion. Non-GAAP net profit consensus for this quarter is $3.12 billion, a 3% increase YoY and a 2% increase QoQ. The company's guidance cap is $3.24 billion.

Three Things to Watch

1. Surprise AI server push: big narrative, thin details

Last week, Qualcomm announced its AI200/AI250 rack-scale inference systems, officially entering the data center AI market with a mass production target of 2026–2027—more than a year ahead of previous guidance. The first launch customer is HUMAIN, which plans to deploy approximately 200 MW starting in 2026.

While this provides a new option for the inference market, details on orders and ecosystem partners beyond the first customer remain limited; even specifications are vague. Furthermore, the $2.4 billion acquisition of AlphaWave, instrumental in opening the AI market for Qualcomm, may require antitrust approval from China. Management needs to provide clearer guidance on whether this deal can close on schedule in 2026.

Investors should focus on:

~The revenue ramp-up timeline (2026/2027).

~Gross margins relative to the QCT average.

~New customers/trials beyond HUMAIN.

~Software stack maturity and TCO (Total Cost of Ownership) comparison against $NVIDIA (NVDA.US)$ / $Advanced Micro Devices (AMD.US)$ .

2. Apple risk later, but iPhone 17 strength could lift near-term handsets

Structurally, Apple is pushing its in-house modem development, and Qualcomm's supply agreement with $Apple (AAPL.US)$ , which covers up to 2026, faces future market share risk. However, in the short term, the iPhone 17 lineup—which reportedly uses Qualcomm modems in all models except the iPhone Air—is guided for double-digit YoY growth in the holiday season. This is expected to positively impact Qualcomm's handset and licensing businesses.

Last quarter, Qualcomm's management guided for a 5% QoQ increase in handset revenue, driven primarily by new Android Snapdragon products, with Apple revenue expected to decline QoQ. It now appears more likely that Apple revenue will also achieve sequential growth.

Investors should focus on:

~The seasonal balance between Android and Apple during the holiday quarter.

~The handset outlook for the first half of 2026.

~Any updates on Apple's modem share post-2026.

Meanwhile, the strategic importance of PC (Snapdragon X) remains, but enterprise demand is leaning more toward the Win10 retirement refresh cycle rather than AI-driven purchases, and the Arm PC ecosystem is still ramping. This creates higher execution hurdles and structural tests for the IoT segment (which includes PC/Consumer Computing). Last quarter, management maintained its FY29 non-handset revenue guidance of $22.0 billion.

Investors should focus on:

~The automotive revenue cadence and the realization of 2026 design wins.

~PC sales volume, software compatibility, and OEM expansion.

~IoT sub-segment performance (Consumer Computing vs. Industrial/Networking) and gross margin guardrails.

Summary

In summary, because market expectations for Qualcomm's growth have been low, its long-term valuation has trailed the industry average, creating significant potential for an earnings beat. This quarter, the market will be particularly focused on management's specific plans for its AI strategy, which is crucial to Qualcomm's long-term valuation logic.

However, a review of Qualcomm's stock performance on earnings days over the last eight quarters, which saw the stock fall six times, warrants caution.

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