Qualcomm (QCOM) shares are down 10% over the past year, after a May rally on hopes for AI devices, cars and data centers unwound, and have lost 35% since their May 29 peak. Handset revenue fell 20% in the June quarter while automotive revenue rose 61%, and Apple-related revenue is fading faster than planned. The CFO said in September that phones had hit bottom, but Intel warned on October 29 that memory shortages will keep shrinking the PC market. Qualcomm's adjusted EPS guidance of $2.05–$2.25 for the September quarter trailed the $2.36 analysts expected, and the stock trades at about 18x forward earnings versus a five-year average of 14x. The author argues that data center revenue must arrive on time to justify that valuation, and points to the November 4 report as the next key test.
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