Qualcomm secured a major AI-related custom silicon engagement with ByteDance, involving millions of Qualcomm ASICs for data centers and AI agent software, including the Doubao chatbot. The news drove a sharp stock jump and supports Qualcomm’s data center pivot and its Alphawave Semi acquisition. Automotive revenue reached a record $1.326 billion in Q2 FY26, up 38% year over year, while IoT revenue rose to $1.726 billion, up 9%. Combined automotive and IoT grew 20% year over year. Handset revenue faced memory supply constraints and Chinese OEM softness, but results still beat estimates. Q3 guidance calls for $9.2 billion to $10 billion revenue and $2.10 to $2.30 non-GAAP EPS, with expectations that Chinese handset revenues bottom in Q3 and grow sequentially afterward.
"Then news broke that ByteDance will buy millions of Qualcomm ASICs to power its data centers and AI agent software, including the Doubao chatbot. The stock surged 11.6% in a single session on the news. CEO Cristiano Amon told investors on the Q2 call that the "leading hyperscaler custom silicon engagement is on track for initial shipments later this calendar year." This validates the $2.4 billion Alphawave Semi acquisition and the entire data center pivot. Qualcomm has a customer with real volume."
"Q2 FY26 automotive revenue hit a record $1.326 billion, up 38% year over year. IoT was $1.726 billion, up 9%. Combined, automotive plus IoT grew 20% year over year. The handset business is fighting memory supply constraints and Chinese OEM softness, and Qualcomm still beat estimates: $10.599 billion in revenue and $2.65 in non-GAAP EPS, the fourth straight quarter of beating both lines."
"Q3 guidance is cautious at $9.2 billion to $10 billion in revenue and $2.10 to $2.30 in non-GAAP EPS, with management telling investors that Chinese handset revenues will bottom in Q3 and return to sequential growth the following quarter. I am willing to wait on that."
Read at 24/7 Wall St.
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