Qualcomm Q3 earnings to highlight AI's impact on smartphone market, data center plans

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Chipmaker Qualcomm (QCOM) volition study its 3rd 4th net connected Wednesday, giving investors a person look astatine the interaction the planetary representation shortage is having connected smartphone income and the presumption of the company's upcoming information halfway segment.

Qualcomm is moving to diversify its concern to trim its dependence connected its handset business, which has slowed implicit the years, arsenic customers clasp connected to their phones for longer earlier upgrading.

And with smartphone makers expanding prices to offset the rising outgo of representation and retention chips caused by the planetary AI buildout, the handset marketplace is looking rough.

"The smartphone manufacture is not great," Bernstein expert Stacy Rasgon told Yahoo Finance's Julie Hyman connected Wednesday.

"Memory prices are going up, and AI is benignant of sucking up a batch of the supply. And truthful it's conscionable not leaving a batch for the smartphone players. And we're seeing portion maturation has gone negative," helium added.

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For the 3rd quarter, Qualcomm is anticipated to study net per stock (EPS) of $2.21 connected gross of $9.6 billion. That's down from an EPS of $2.77 and gross of $10.3 that the institution saw successful the aforesaid play past year.

To code concerns astir smartphone dependence, Qualcomm is expanding into the AI information halfway space.

During its capitalist time successful June, the institution showed disconnected its enactment of information halfway offerings and servers, including an AI accelerator, CPU, memory, and rackscale server.

CFO Akash Palkhiwala told Yahoo Finance pursuing the lawsuit that the institution expects its information halfway products to make $5 cardinal successful gross successful fiscal 2027. It besides doubled its non-handset income projections for its fiscal 2029 to $40 billion.

But the broader diminution successful smartphone income is expected to deed the institution sooner than that.

QCOM), an American semiconductor and wireless exertion institution specializing successful mobile processors, connectivity solutions and connection technologies, successful beforehand of a surface showing the company's latest banal marketplace illustration connected July 23, 2026 successful Shenzhen, Guangdong Province, China. (Photo illustration by Cheng Xin/Getty Images)

According to CounterPoint Research, Q2 planetary smartphone shipments fell 11% year-over-year, marking the industry's worst 2nd 4th successful 13 years.

Qualcomm's CMDA Technologies (QCT) conception revenue, which includes smartphone, net of things, and automotive sales, is expected to diminution 8% twelvemonth implicit twelvemonth to $8.2 billion.

Handset income successful peculiar are projected to autumn astir 21% twelvemonth implicit twelvemonth to $4.9 billion. Automotive related sales, however, are anticipated to summation 49% to $1.4 cardinal successful the quarter.