"Barclays builds its bearish thesis on three interconnected problems. First, memory headwinds are hammering the handset environment, backed by data. Qualcomm's handset revenue growth decelerated sharply from +14% year-over-year in Q4 FY25 to just +3% in Q1 FY26, and Q2 FY26 guidance cited industry-wide memory supply constraints weighing on handset demand."
"Second, even giving Qualcomm significant credit for automotive and IoT, those segments won't offset the difficult handset environment. Automotive delivered $1.1 billion in Q1 FY26, up 15% year-over-year, and IoT generated $1.69 billion, up 9%. Yet handsets still represent $7.82 billion of the $10.61 billion QCT segment, making it the undisputed center of gravity."
"Third, forward-looking growth stories don't hold water for Barclays. 'AI at the edge is still several years away,' the firm says, and Qualcomm's data center play 'is yet to be proved out.' A June analyst day is expected to detail the data center strategy, but Barclays isn't waiting for that narrative to develop."
Barclays has issued a bearish call on Qualcomm, reinstating an Underweight rating with a $130 price target, which is lower than UBS's recent target of $150. The firm identifies three main issues: declining handset revenue growth due to memory supply constraints, insufficient offset from automotive and IoT segments, and skepticism about future growth in AI and data centers. Qualcomm's stock is currently trading at $137, down 20% year-to-date, indicating potential further downside if Barclays' thesis is accurate.
Read at 24/7 Wall St.
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