Qualcomm (NASDAQ:QCOM) Shares Down 11% - Here's What Happened

Key Points

• Qualcomm shares fell 11% in Friday trading, dropping to as low as $215.00 after closing the prior day at $242.57. Trading volume was unusually heavy at about 23.8 million shares, well above the daily average.
• The stock decline came despite a generally mixed but not negative analyst backdrop: several firms recently raised price targets or upgraded the stock, while MarketBeat shows a consensus rating of Hold with an average target price of $181.79.
• Qualcomm recently beat earnings expectations on quarterly EPS and revenue, and it also announced a dividend increase to $0.92 per share along with a $20 billion share buyback authorization, signaling confidence in the business.

Shares of Qualcomm Incorporated (NASDAQ:QCOM - Get Free Report) dropped 11% during trading on Friday . The company traded as low as $215.00 and last traded at $215.94. Approximately 23,790,452 shares changed hands during trading, an increase of 48% from the average daily volume of 16,088,134 shares. The stock had previously closed at $242.57.

Wall Street Analysts Forecast Growth

A number of brokerages recently weighed in on QCOM. Citigroup lifted their target price on Qualcomm from $140.00 to $160.00 and gave the company a "neutral" rating in a report on Thursday, April 30th. Cantor Fitzgerald raised their price objective on Qualcomm from $135.00 to $150.00 and gave the stock a "neutral" rating in a report on Thursday, April 30th. Rosenblatt Securities reiterated a "buy" rating and set a $190.00 target price on shares of Qualcomm in a report on Thursday, April 30th. Argus set a $220.00 price target on shares of Qualcomm in a report on Friday, May 1st. Finally, Summit Insights upgraded shares of Qualcomm from a "hold" rating to a "buy" rating in a research note on Thursday, April 30th. Fourteen research analysts have rated the stock with a Buy rating, sixteen have given a Hold rating and four have given a Sell rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of "Hold" and an average target price of $181.79.

Qualcomm Stock Down 11.0%

The company has a market capitalization of $227.60 billion, a price-to-earnings ratio of 23.47, a P/E/G ratio of 30.97 and a beta of 1.59. The company has a quick ratio of 1.61, a current ratio of 2.37 and a debt-to-equity ratio of 0.54. The firm has a 50 day moving average price of $174.95 and a two-hundred day moving average price of $163.03.

Qualcomm (NASDAQ:QCOM - Get Free Report) last issued its quarterly earnings data on Wednesday, April 29th. The wireless technology company reported $2.65 earnings per share for the quarter, beating analysts' consensus estimates of $2.56 by $0.09. The firm had revenue of $10.60 billion during the quarter, compared to analyst estimates of $10.59 billion. Qualcomm had a return on equity of 42.11% and a net margin of 22.31%.Qualcomm's quarterly revenue was down 3.5% on a year-over-year basis. During the same quarter last year, the firm earned $2.85 EPS. Qualcomm has set its Q3 2026 guidance at 2.100-2.300 EPS. As a group, sell-side analysts expect that Qualcomm Incorporated will post 7.99 earnings per share for the current year.

Qualcomm Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 25th. Shareholders of record on Thursday, June 4th will be issued a $0.92 dividend. This is an increase from Qualcomm's previous quarterly dividend of $0.89. This represents a $3.68 dividend on an annualized basis and a yield of 1.7%. The ex-dividend date of this dividend is Thursday, June 4th. Qualcomm's dividend payout ratio is 38.70%.

Qualcomm declared that its board has initiated a share buyback plan on Tuesday, March 17th that authorizes the company to buyback $20.00 billion in shares. This buyback authorization authorizes the wireless technology company to reacquire up to 14.5% of its stock through open market purchases. Stock buyback plans are often a sign that the company's board of directors believes its stock is undervalued.

Insider Activity

In other news, EVP Akash J. Palkhiwala sold 2,500 shares of the business's stock in a transaction that occurred on Monday, April 13th. The stock was sold at an average price of $130.34, for a total transaction of $325,850.00. Following the completion of the transaction, the executive vice president directly owned 30,684 shares in the company, valued at approximately $3,999,352.56. The trade was a 7.53% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Heather S. Ace sold 3,200 shares of the company's stock in a transaction that occurred on Monday, May 4th. The stock was sold at an average price of $177.82, for a total transaction of $569,024.00. Following the completion of the sale, the executive vice president directly owned 39,735 shares of the company's stock, valued at approximately $7,065,677.70. This represents a 7.45% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 19,306 shares of company stock worth $3,435,583 over the last ninety days. Insiders own 0.05% of the company's stock.

Institutional Trading of Qualcomm

Hedge funds and other institutional investors have recently modified their holdings of the company. Vanguard Group Inc. lifted its holdings in Qualcomm by 0.6% in the 4th quarter. Vanguard Group Inc. now owns 114,144,068 shares of the wireless technology company's stock valued at $19,524,350,000 after acquiring an additional 647,076 shares during the last quarter. Geode Capital Management LLC raised its holdings in shares of Qualcomm by 12.5% in the 4th quarter. Geode Capital Management LLC now owns 28,897,079 shares of the wireless technology company's stock worth $4,931,968,000 after purchasing an additional 3,221,924 shares in the last quarter. Wellington Management Group LLP lifted its stake in Qualcomm by 34.5% during the fourth quarter. Wellington Management Group LLP now owns 16,727,862 shares of the wireless technology company's stock valued at $2,861,301,000 after purchasing an additional 4,290,622 shares during the last quarter. Norges Bank bought a new stake in Qualcomm during the fourth quarter worth approximately $2,591,056,000. Finally, Amundi boosted its holdings in Qualcomm by 9.9% during the third quarter. Amundi now owns 12,671,635 shares of the wireless technology company's stock worth $2,136,486,000 after buying an additional 1,138,541 shares in the last quarter. Institutional investors own 74.35% of the company's stock.

Qualcomm Company Profile

Qualcomm Incorporated is a global semiconductor and telecommunications equipment company headquartered in San Diego, California. Founded in 1985, the company is known for its development of wireless technologies and for playing a central role in the evolution of digital cellular standards, including CDMA and subsequent generations of mobile standards. Qualcomm’s business combines the design and sale of semiconductor products with a patent licensing program for wireless technologies and related intellectual property.

The company’s product portfolio includes system-on-chip (SoC) platforms marketed under the Snapdragon brand, cellular modem and RF front-end components, connectivity solutions for Wi‑Fi and Bluetooth, and processors and platforms aimed at automotive, IoT, networking and edge-computing applications.

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