Shares of Qualcomm (NASDAQ:QCOM | QCOM Price Prediction) are up roughly 7% in early Monday trading, extending a powerful run that already saw the stock jump 11% on Friday after the earnings print. The pre-market tape has been wild, with QCOM stock printing a high of $170 at 7:30 a.m. ET before settling near $159 by 9:20 a.m. ET.
What makes the rally striking is the headline setup. Qualcomm just guided next quarter’s revenue to $10.2 billion to $11 billion, well below where the Street had been positioned, and management flagged industry-wide memory supply constraints squeezing smartphone OEM production. By the textbook, that’s a sell-the-news event.
Instead, QCOM shares are climbing. The catalyst pushing investors past the soft outlook is an aggressive capital return program, paired with a long-term diversification story that bulls argue is finally showing up in the numbers.
Record Revenue and a $2.6B Buyback Override the Miss
Qualcomm’s Q1 FY2026 print was strong on the surface. Revenue came in at $12.25 billion, up 5% year over year and a record for the company, while non-GAAP diluted EPS of $3.50 beat consensus by 3%.
The bigger signal was the capital return. Qualcomm repurchased 15 million shares for $2.6 billion and paid out $949 million in dividends, bringing total capital return to $3.6 billion in a single quarter. When management leans this hard into buybacks during a guided-down cycle, it tends to read as confidence that the trough is in.
Diversification is also doing real work for Qualcomm. Automotive revenue hit $1.1 billion, up 15%, marking a second straight billion-dollar quarter, while IoT climbed 9% to $1.69 billion. Those non-handset lines are exactly what bulls have been waiting to see scale.
The Bear Case Bulls Are Brushing Aside
The bear list isn’t short. Memory supply constraints are throttling handset unit production across the industry, and Qualcomm’s Q2 guide reflects that pressure directly. CEO Cristiano Amon acknowledged the headwind, saying “our near-term handsets outlook is impacted by industry-wide memory supply constraints” while reaffirming the fiscal 2029 revenue goals.
Insider activity isn’t encouraging. Qualcomm CFO Akash Palkhiwala has been a consistent net seller, with disposals as recently as April 13, and there have been no material open-market purchases from executives during the recent drawdown.
QCOM stock is still down 13% year to date despite the recent bounce, having started 2026 at $169.95. The 52-week high of $203.6 is still a long way off.
Why the Buyback Signal Carries Extra Weight
Aggressive repurchases during a guidance miss are unusual, and that’s why traders are leaning in. The prediction market on Polymarket is pricing a 93% probability that Qualcomm beats its next quarterly earnings, suggesting expectations have been reset and the buyback acts as a floor under the stock.
The historical pattern reinforces this read. Across the last four quarters, QCOM averaged a +2% one-week post-earnings gain even after rough day-of reactions. For a deeper look at how buyback-heavy semis are trading right now, see our recent semiconductor capital return roundup.
Valuation gives bulls another lever. Qualcomm trades at a forward earnings multiple of 14x, with a dividend yield of 3% and an analyst target of $150.10.
What to Watch Next
Investors should watch for whether Monday’s gap holds into the close, and whether QCOM stock can reclaim its 200-day moving average near $156.55. Conference call commentary on the memory supply timeline and automotive revenue cadence may set the tone for the rest of the quarter.
The next big tell for QCOM stock could come from peer commentary later this week. If memory headwinds prove transitory, today’s move might mark the start of a broader rerating for Qualcomm.
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