Qualcomm shares surge on earnings beat, $20B buyback and data center timeline

Shares in Qualcomm Inc. rose more than 15% in late trading today after the chipmaker reported earnings and revenue beats in its fiscal 2026 second quarter and announced a fresh $20 billion share buyback authorization alongside a firm timeline for its long-awaited data center entry.

For the quarter that ended on March 29, Qualcomm reported adjusted earnings per share of $2.65, down from $2.85 in the same quarter of the previous year, on revenue of $10.6 billion, down 2% year-over-year. Both figures came in ahead of the $2.55 per share and revenue of $10.58 billion expected by analysts.

Qualcomm’s CDMA Technologies chip business saw revenue of $9.08 billion in the quarter, down 4% year-over-year, with handset revenue falling 13%, to $6.02 billion, automotive revenue rising 38% year-over-year, to a record $1.33 billion, and Internet of Things revenue growing 9%, to $1.73 billion. The company’s licensing business reported revenue of $1.38 billion in the quarter, up 5% year-over-year.

The quarter saw Qualcomm return $3.7 billion to shareholders, including $945 million in dividends and $2.8 billion through the repurchase of 19 million shares. The company has now completed $5.4 billion in buybacks through the first half of fiscal 2026 and announced a new $20 billion repurchase authorization on top of the existing program.

The other standout from the quarterly report that drove the share price increase was confirmation from Qualcomm Chief Executive Cristiano Amon that the company’s data center push is moving from concept to commercial reality. “We are equally excited by our entry into the data center, where a leading hyperscaler custom silicon engagement is on track for initial shipments later this calendar year,” Amon said in the company’s earnings release.

Amon added that Qualcomm would provide a fuller update on its data center and physical artificial intelligence growth initiatives at an investor day scheduled for June 24.

For its fiscal third quarter, Qualcomm said that it expects adjusted earnings per share of $2.10 to $2.30 on revenue of $9.2 billion to $10 billion. Both figures were short of the $2.43 per share and revenue of $10.26 billion expected by analysts.

Qualcomm attributed the cautious outlook to memory supply constraints and related pricing pressure on several handset original equipment manufacturers. The company added that handset revenue from Chinese customers should bottom out in the third quarter and return to sequential growth in the following quarter.

A company that falls short on forward estimates typically sees its share price decline and that was briefly true for Qualcomm. Shares initially dropped more than 6% after the earnings report was released before reversing course, as investors latched onto the data center timeline and the buyback authorization as reasons to look past the soft guidance.

Photo: Qualcomm