Is Qualcomm Stock a Buy Ahead of July 29 Q3 Earnings?
Qualcomm reports Q3 earnings on July 29 with Polymarket odds heavily favoring a beat, yet the stock still trades at a fraction of its chip rivals' valuations. Whether that gap closes depends on what management says about a pending hyperscaler…
Qualcomm (NASDAQ:QCOM | QCOM Price Prediction) heads into Wednesday’s Q3 earnings report on July 29 at just 15x forward earnings, despite returning billions of dollars to shareholders and expanding beyond smartphones. Qualcomm also offers investors a dividend yield above 2% alongside exposure to growing automotive, IoT, and hyperscaler chip businesses.
Qualcomm’s 15x Forward P/E Leaves Room for Upside
QCOM trades at a trailing P/E of 18, a forward P/E of 15, and a PEG of 0.527. Analysts’ consensus price target sits at $221.23, roughly 31.27% above Monday’s $166.97 open. The business’s free cash flow yield sits at 7.28% against a $175.99 billion market cap, backed by FY25 free cash flow of $12.82 billion.
A $20 Billion Buyback Authorization Could Shrink the Share Count
The recent $0.89 quarterly dividend delivers a 2.16% annualized dividend yield, and management returned $12.596 billion to shareholders in FY25 ($8.791 billion in buybacks retiring 56 million shares plus $3.805 billion in dividends).
First-half FY26 already saw $5.4 billion in shares repurchased against the newly authorized $20 billion program. The company’s 18.6x interest coverage ratio and net debt/EBITDA of 0.61 give the business a strong balance sheet for continued capital returns.
Wednesday’s Earnings Could Confirm the Next Growth Cycle
Qualcomm is dropping its Q3 FY26 results on Wednesday, July 29. Polymarket currently assigns a 90.5% probability that QCOM beats consensus, which makes sense considering the company has delivered four consecutive EPS beats ahead of this week’s results.
CEO Cristiano Amon has already confirmed a “leading hyperscaler custom silicon engagement is on track for initial shipments later this calendar year.“ Automotive plus IoT grew 20% YoY last quarter, with Automotive alone up 38% to a record $1.326 billion.
QCOM Trades at Less Than Half Nvidia’s P/E and Offers Dividend Income
NVIDIA’s (NASDAQ:NVDA) trailing P/E ratio of 42 is more than double QCOM’s 18. Qualcomm also offers a meaningful 2.16% dividend yield, compared with Nvidia’s negligible 0.02%, while its 7.28% free cash flow yield easily tops Nvidia’s 1.93%. Both companies are pursuing hyperscaler custom silicon opportunities in 2026, but Qualcomm offers better dividend income along with a stronger FCF yield.
China Is the Biggest Risk, but a Recovery Could Begin Next Quarter
Bears point at Chinese handset softness and memory supply constraints, which pulled Q2 FY26 handset revenue down 13% YoY. Management has explicitly guided Chinese handsets to bottom in Q3, with sequential recovery expected in Q4.
Meanwhile, automotive and IoT revenue continues to grow, a hyperscaler chip launch is approaching, and Qualcomm is returning substantial cash through dividends and buybacks. At 15x forward earnings, Wednesday’s report could show whether investors are placing too much weight on the temporary handset slowdown.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
