Qualcomm gets $218.57 target as hyperscaler chip deals near revenue

The setup behind the call is a company whose headline numbers look weak but whose mix is shifting. In fiscal Q3, Qualcomm's revenue of $9.95 billion beat the $9.67 billion estimate, yet non-GAAP EPS of $2.21 missed the $2.22 estimate, ending a six-quarter beat run. Handset revenue fell 20%, and management expects Apple product revenue to drop about 50% from the September quarter to the December quarter. Against that, automotive revenue rose 61% to $1.59 billion, and Qualcomm raised its exit-rate outlook for automotive to about $7 billion a year after BMW named it lead compute provider.

The two hyperscaler custom silicon engagements are the piece the market may still be discounting. Management is aiming for $40 billion in non-handset revenue by fiscal 2029, including more than $15 billion from the data center, and wafer production for the hyperscaler chips has already begun. The HBC accelerator is scheduled to launch in mid-2027. If December-quarter data center revenue arrives as promised, the case for re-rating Qualcomm away from a handset multiple strengthens.

The cautious side is visible in analyst sentiment, with 23 Hold ratings against 11 Buy or Strong Buy ratings. Operating income fell 41.13% as memory and wafer costs rose, and Qualcomm is rolling out double-digit price increases that bulls expect to bring gross margins back to their historical range. The 24/7 Wall St. bear case of $185.64 still sits above today's price, which frames the debate as one about timing and execution rather than downside.