Over the last twelve months, Qualcomm generated free cash flow equal to 5.5% of its market value, above the 4.4% yield for the median S&P 500 company, yet its revenue fell in each of its last two quarters. Free cash flow has declined for two consecutive years, from $12.6 billion in the twelve months to June 2024 to $10.4 billion in the twelve months to June 2026. Management attributed weaker phone chip sales to industry-wide memory prices, expects Apple revenue to step down faster in fiscal Q4 2026, and is raising chip prices by a double-digit percentage. Automotive chip revenue hit a record $1.6 billion in fiscal Q3, and the company now targets $40 billion of revenue outside phones by fiscal 2029, up from $22 billion. The article notes debt of $15.3 billion against $8.3 billion in cash and short-term investments, with operating profit at 14.9 times interest costs, and says the key question is whether free cash flow can steady as Apple revenue declines.
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