- Qualcomm revenue and earnings surpass estimates in Q2 2025, yet shares fall due to soft guidance.
- Investor focus shifts to AI demand and smartphone recovery as mobile revenues slightly decline.
What happened: Strong Q2 earnings but weak outlook
Qualcomm posted better-than-expected results for its fiscal Q2 2025, with earnings of $2.44 per share on $9.44 billion in revenue. This beat analyst expectations of $2.32 per share and $9.37 billion in revenue, according to Refinitiv data. Despite this performance, Qualcomm’s shares dropped nearly 2% in after-hours trading, as the company projected Q3 revenue between $8.8 billion and $9.6 billion—roughly in line with Wall Street estimates but not exceeding them.
The mobile handset chip segment, Qualcomm’s core business, delivered $6.18 billion in revenue, slightly down from $6.29 billion in the previous year. Meanwhile, revenue from Internet of Things (IoT) and automotive sectors also saw slight declines. Qualcomm’s licensing division, which collects royalties for using its patented technologies, reported $1.3 billion in revenue. CEO Cristiano Amon pointed to the company’s expanding role in AI-capable chips, calling it “well-positioned for the AI era.”
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Why this is important
The muted market reaction to Qualcomm’s earnings underscores the cautious sentiment in the chip sector, where investors increasingly demand strong AI growth signals. While Qualcomm has a strong position in mobile handsets, competitors such as Nvidia and AMD are drawing attention for their performance in AI and data centre chips. Qualcomm’s heavy reliance on smartphone markets—which remain in gradual recovery—raises concerns about future growth, especially in China where geopolitical tensions linger.
Furthermore, the automotive and IoT segments, once expected to be new growth pillars, have not yet scaled to offset softness in core handset sales. While Qualcomm is pushing to expand in AI-powered on-device processing, it lags rivals in large-scale AI acceleration. The results reflect broader industry headwinds, as seen in Intel’s slower-than-expected AI ramp and Apple’s smartphone shipment volatility. Qualcomm’s current position is stable, but its future depends on its ability to shift beyond mobile and compete in high-performance AI hardware.
