Shares of Qualcomm Inc (NASDAQ:QCOM, XETRA:QCI) rose 12.6% on Thursday morning after the San Diego-based chipmaker reported second-quarter fiscal 2026 results that edged past analyst expectations, as surging automotive revenue and a broadening artificial intelligence strategy offset weakness in its handset business and a cautious near-term outlook.
The San Diego-based chipmaker posted revenue of $10.6 billion against an estimate of $10.56 billion, while adjusted earnings per share came in at $2.65, ahead of the $2.55 consensus.
Shares rose 12.6% on Thursday morning.
Automotive revenue was the standout, climbing 38% year-over-year to $1.33 billion, with the combined automotive and IoT segment rising 20%. IoT revenue grew 9% to $1.73 billion, while the company's handset business declined 13% to $6.02 billion as original equipment manufacturers worked down inventories.
Overall QCT revenue fell 4% year-over-year to $9.08 billion, with licensing revenue from the QTL segment rising 5% to $1.38 billion.
For the third quarter, Qualcomm guided revenue of $9.2 billion to $10 billion, below the $10.26 billion analysts had expected, and adjusted EPS of $2.10 to $2.30, also trailing the $2.43 consensus.
“We are in a period of profound industry transformation — the rise of AI agents is reshaping our roadmap across every platform we develop,” CEO Cristiano Amon said in a statement.
Amon also highlighted the company's entry into the data center, pointing to a custom silicon engagement with a leading hyperscaler that is on track for initial shipments later this calendar year. "We are equally excited by our entry into the data center," he said.
The company authorized a new $20 billion share buyback program. In the second quarter, Qualcomm returned $3.7 billion to shareholders, including $2.8 billion in repurchases across 19 million shares and $945 million in dividends, or $0.89 per share. First-half buybacks totaled $5.4 billion.
Analysts at Baird raised their price target on Qualcomm to $300 and maintained an Outperform rating, citing agentic AI as a secular growth driver across Qualcomm's compute platforms, including smartphones, PCs, automotive, and data center.
Baird noted that as AI agents increasingly rely on CPUs, Qualcomm is positioned to benefit from that demand both inside and outside the data center.
Analysts also flagged revenue diversification as an accelerating trend, noting that automotive now represents roughly 13% of total revenue and is expected by management to exit the year at a $6 billion annualized run rate.
The firm added that Qualcomm's eventual exit from Apple's supply chain could unlock multiple expansion as its smartphone business re-accelerates.