Qualcomm (NASDAQ:QCOM) Trading Down 3.9% - Here's What Happened

Key Points

• Qualcomm shares fell 3.9% on Wednesday, with heavier-than-normal trading volume as the stock dipped from a prior close of $204.13 to around $196.11.
• The company is making a major AI push, including a roughly $3.9 billion deal to buy Modular and reported talks to provide custom chip-design services to ByteDance, aiming to diversify beyond smartphones.
• Despite beating quarterly EPS estimates, Qualcomm is facing investor caution over a crowded AI market and execution risk, even as it raised its dividend and maintains a large $20 billion buyback authorization.

Qualcomm Incorporated (NASDAQ:QCOM - Get Free Report) was down 3.9% during trading on Wednesday . The company traded as low as $191.02 and last traded at $196.1140. 23,529,853 shares traded hands during mid-day trading, an increase of 42% from the average session volume of 16,621,422 shares. The stock had previously closed at $204.13.

More Qualcomm News

Here are the key news stories impacting Qualcomm this week:

• Positive Sentiment: Qualcomm agreed to buy AI software startup Modular for about $3.9 billion, a deal aimed at improving AI performance, broadening its software capabilities, and reducing reliance on smartphones. Reuters: Qualcomm to buy AI startup Modular
• Positive Sentiment: Qualcomm is reportedly in talks to provide custom chip-design services to ByteDance, which could create another non-smartphone growth avenue if finalized. Reuters: Qualcomm in talks with ByteDance
• Neutral Sentiment: Qualcomm’s Investor Day is expected to focus on its push into AI data center chips, but analysts note it is a late entrant in a very crowded AI market, which may limit enthusiasm. Reuters: Qualcomm bets on AI chips
• Neutral Sentiment: Recent commentary suggests Qualcomm’s AI pivot could be attractive over time, but some analysts remain cautious heading into the company’s AI presentation. Benzinga: Analyst cautious on Qualcomm
• Negative Sentiment: The stock has also been pressured by broader tech selling and worries that Qualcomm’s AI ambitions may take time to translate into meaningful revenue, creating execution risk. Invezz: Qualcomm eyes Modular AI deal as stock falls

Analyst Upgrades and Downgrades

A number of equities research analysts have recently weighed in on the company. Benchmark lifted their target price on Qualcomm from $200.00 to $225.00 and gave the stock a "buy" rating in a report on Thursday, April 30th. Deutsche Bank Aktiengesellschaft restated a "hold" rating and issued a $160.00 price target on shares of Qualcomm in a research note on Thursday, April 30th. Sanford C. Bernstein reiterated a "market perform" rating and issued a $140.00 price objective (down from $175.00) on shares of Qualcomm in a research note on Thursday, March 26th. Zacks Research raised shares of Qualcomm from a "strong sell" rating to a "hold" rating in a report on Monday, May 4th. Finally, Craig Hallum upgraded shares of Qualcomm to a "buy" rating in a research report on Friday, May 8th. Fifteen research analysts have rated the stock with a Buy rating, sixteen have given a Hold rating and three have issued a Sell rating to the company. According to MarketBeat, the company has a consensus rating of "Hold" and a consensus price target of $191.90.

Qualcomm Price Performance

The firm has a market cap of $206.70 billion, a P/E ratio of 21.32, a PEG ratio of 27.57 and a beta of 1.59. The company has a debt-to-equity ratio of 0.54, a current ratio of 2.37 and a quick ratio of 1.61. The company's 50-day moving average is $197.22 and its two-hundred day moving average is $167.32.

Qualcomm (NASDAQ:QCOM - Get Free Report) last released its earnings results on Wednesday, April 29th. The wireless technology company reported $2.65 EPS for the quarter, beating the consensus estimate of $2.56 by $0.09. The firm had revenue of $10.60 billion for the quarter, compared to analyst estimates of $10.59 billion. Qualcomm had a net margin of 22.31% and a return on equity of 42.11%. The business's quarterly revenue was down 3.5% compared to the same quarter last year. During the same period last year, the firm earned $2.85 EPS. Qualcomm has set its Q3 2026 guidance at 2.100-2.300 EPS. Sell-side analysts anticipate that Qualcomm Incorporated will post 7.97 EPS for the current fiscal year.

Qualcomm Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, June 25th. Shareholders of record on Thursday, June 4th will be given a dividend of $0.92 per share. This is an increase from Qualcomm's previous quarterly dividend of $0.89. This represents a $3.68 annualized dividend and a yield of 1.9%. The ex-dividend date is Thursday, June 4th. Qualcomm's dividend payout ratio (DPR) is presently 40.00%.

Qualcomm announced that its board has authorized a stock repurchase program on Tuesday, March 17th that allows the company to buyback $20.00 billion in shares. This buyback authorization allows the wireless technology company to repurchase up to 14.5% of its stock through open market purchases. Stock buyback programs are typically a sign that the company's board of directors believes its shares are undervalued.

Insiders Place Their Bets

In other news, EVP Heather S. Ace sold 3,200 shares of Qualcomm stock in a transaction on Monday, May 4th. The stock was sold at an average price of $177.82, for a total value of $569,024.00. Following the transaction, the executive vice president owned 39,735 shares in the company, valued at approximately $7,065,677.70. This trade represents a 7.45% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP Akash J. Palkhiwala sold 2,500 shares of the business's stock in a transaction on Thursday, June 11th. The stock was sold at an average price of $197.35, for a total value of $493,375.00. Following the transaction, the executive vice president directly owned 25,684 shares of the company's stock, valued at $5,068,737.40. This trade represents a 8.87% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 21,806 shares of company stock worth $3,928,958. 0.05% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in QCOM. Pacer Advisors Inc. boosted its position in Qualcomm by 24.7% in the first quarter. Pacer Advisors Inc. now owns 2,975,238 shares of the wireless technology company's stock valued at $383,151,000 after buying an additional 589,717 shares in the last quarter. Southern Financial Group LLC increased its holdings in shares of Qualcomm by 11.8% during the first quarter. Southern Financial Group LLC now owns 2,596 shares of the wireless technology company's stock worth $334,000 after buying an additional 274 shares in the last quarter. Pine Valley Investments Ltd Liability Co lifted its stake in shares of Qualcomm by 2.3% in the 1st quarter. Pine Valley Investments Ltd Liability Co now owns 29,713 shares of the wireless technology company's stock valued at $3,826,000 after acquiring an additional 665 shares during the last quarter. Chelsea Counsel Co. lifted its stake in shares of Qualcomm by 12.0% in the 1st quarter. Chelsea Counsel Co. now owns 6,518 shares of the wireless technology company's stock valued at $839,000 after acquiring an additional 700 shares during the last quarter. Finally, CoreFirst Bank & Trust boosted its holdings in shares of Qualcomm by 17.3% during the 1st quarter. CoreFirst Bank & Trust now owns 712 shares of the wireless technology company's stock valued at $92,000 after acquiring an additional 105 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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