As Qualcomm Diversifies, Growth Acceleration Will Support Stock Upside

At a quick glance, Qualcomm (QCOM) seems unattractive, with second-quarter fiscal 2026 revenue declining by 3% on a year-over-year (YOY) basis. The negative catalyst for the company was a decline in QCT handset revenue on the back of memory supply constraints. However, even with the headwinds, QCOM stock has trended higher by 47% in the last 52 weeks.

The rally can be attributed to two factors. First, Qualcomm expects QCT handset revenue from China to reach a bottom in Q3, then “return to sequential growth in the following quarter.” Second, QCOM stock is pricing the AI diversification and its impact on growth. As a matter of fact, Qualcomm already has a custom silicon engagement with a major hyperscaler. Initial shipments are expected toward the end of 2026 and its entry into the data-center business is likely to create value.