Despite market anxiety over an accelerating Apple Inc. (NASDAQ:AAPL) phase-out, tech analyst Patrick Moorhead believes Qualcomm Inc. (NASDAQ:QCOM) is executing a crucial transition, anchored by a “rocking” automotive sector and unique data center technology that is “different: from what Nvidia Corp. (NASDAQ:NVDA) is doing.

Automotive Surge and Data Center Ambitions

During its third quarter, central to the bullish case was Qualcomm’s expanding non-handset portfolio. Automotive revenue surged 61% year-over-year to a record $1.6 billion, marking its 23rd consecutive quarter of double-digit growth.

Moorhead, CEO of Moor Insights & Strategy, highlighted this “rocking automotive business” as evidence of Qualcomm’s leadership across industrial IoT and edge AI.

Meanwhile, Qualcomm is making aggressive inroads into the data center space, raising its 2029 non-handset revenue target to $40 billion. Moorhead praised Qualcomm’s new High Bandwidth Compute (HBC) architecture for avoiding a generic approach.

“What I’m really excited about, though, is watching the data center play that was literally at zero 3 months ago,” Moorhead said. He explained that Qualcomm offers “not just a me too product,” but “a new technology called HBC, which is different from what NVIDIA is doing,” as well as Advanced Micro Devices Inc. (NASDAQ:AMD) and Google parent Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) TPU.

With initial custom silicon revenue expected in the December quarter, Moorhead expects data center compute to drive substantial future valuation.

My thoughts on $QCOM earnings with @joshuahlipton on @YahooFinance after a question on smartphone declines:

"Well, in raw (smartphone) units, it's down significantly, but the key is that Qualcomm operates in the premium handset space that hasn't degraded significantly. It seems… https://t.co/2JdB7odovD

— Patrick Moorhead (@PatrickMoorhead) July 29, 2026

Navigating a Strategic Pivot

Qualcomm’s fiscal third-quarter 2026 financial report—where revenue of $9.9 billion beat Wall Street estimates while adjusted EPS of $2.21 missed by two cents—shares fell sharply in after-hours trading.

The drop was fueled by news that Apple-related product sales would plummet decline in the December quarter.

However, Moorhead dismissed long-term fears regarding the handset retreat. Framing the current landscape as a “transition quarter for Qualcomm,” Moorhead emphasized that the chipmaker’s mobile core remains durable.

“Qualcomm owns premium Android,” Moorhead noted, adding that “the China trough, we are out of it” as inventory normalizes across global markets.

The 2027 Execution Benchmark

Reinforcing the focus on diversification, Futurum Group CEO Daniel Newman noted that Qualcomm’s long-term trajectory depends entirely on cloud execution.

While Newman acknowledged that “price increases will help with short term margin pressure,” he stressed that “by next year it needs billions in DC revenue and more than 50% of its revenue needs to be non-handset” for earnings to excel in 2027.

$QCOM long term success will be whether it executes in the Datacenter. Price increases will help with short term margin pressure, but by next year it needs billions in DC revenue and more than 50% of its revenue needs to be non-handset. If it ticks those boxes its earnings will… https://t.co/lnPusCwOJQ

— Daniel Newman (@danielnewmanUV) July 29, 2026

How Has QCOM Performed In 2026?

QCOM shares were up 6.62% year-to-date, down 1.09% over the last month, and higher by 73.28% over the year. It closed 2.19% higher at $333.71 per share on Tuesday, and it was up XX% in premarket on Wednesday.

Benzinga’s Edge Stock Rankings indicate that QCOM maintains a weak price trend in the long, short, and medium terms, with a moderate growth score.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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