Layer 1 · QCOM — QUALCOMM Inc.
Thesis
Beat + record auto ($1.33B, +38% YoY), data-center CPU plans, tariff de-escalation. Tier B because the stock has consolidated after hitting $247 ATH and now sits at $200 — the rerate is partially through, and the Apple modem business sunsets in 2027 is a structural headwind that hasn't fully played out.
What it does + financial print
QCOM is the smartphone modem-and-SoC franchise being repositioned around three AI-era vectors: Snapdragon for AI PCs (Microsoft Copilot+ partnership), Snapdragon Cockpit / Ride for AI in automotive ($1.33B record quarter), and the new data-centre CPU effort (Nuvia-based, server-class Arm cores). The bear case has always been "Apple goes in-house on modems" — the bull case is QCOM has three new growth engines outside handsets.
Q2 FY26 (April 29) printed $10.60B revenue versus ~$10.5B consensus, and $2.65 EPS versus $2.56 (+3.5%). Auto revenue was a record $1.33B (+38% YoY). Guide in-line. The stock hit ATH $247.90 on May 11 then settled back to $200 at writing.
Bull case
The data-centre CPU announcement (rumoured for late 2026) lands with a named hyperscaler design partner. Auto continues to compound at +30%+ YoY. AI PC volumes ramp in Copilot+ as Microsoft pushes Snapdragon. Any one of these — especially the DC CPU — could trigger a Tier A move.
Gap / bear case
Apple modem sunsets in late 2026/early 2027 — that's ~$3-4B annual revenue at high margins disappearing. The DC CPU effort is unproven and competes with AMD EPYC + NVDA Grace at the high end. ATH at $247 means the market has digested the bull case already; the consolidation phase tells you positioning is full.
Trigger to upgrade / downgrade
Upgrade to Tier A on a named DC CPU customer disclosure, OR a pullback to $175-185 that holds. Downgrade on Apple modem cliff materialising faster than expected or DC CPU launch slippage.
The trade
- Entry zone: $175-185 on pullback
- Stop: $162 close (200-day)
- Position size: 1.5% NLV
- Catalyst date: Q3 FY26 print July 30 2026; DC CPU announcement (TBD H2)
- Conviction: 6/10