Qualcomm Says December Won’t Be Its Biggest Quarter Anymore as Apple Walks Away
Qualcomm has known for years that Apple would leave, and now the CFO says it will rewrite the company's calendar. Can automotive and AI data centers fill the gap before the next earnings report tests the story?
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
For years, the holiday iPhone build made December Qualcomm’s (NASDAQ:QCOM | QCOM Price Prediction) biggest quarter. On its November 4, 2026 earnings call, CFO Akash Palkhiwala said that pattern breaks in fiscal 2027 because chip revenue from Apple (NASDAQ:AAPL) is ramping down.
Before the report, shares rose 5.33% in the regular session to close at $173.19, edging higher on a same-day 5G deal with SpaceX (NASDAQ:SPCX). After the report, they fell 7.52% to $160.16 by 7:59 p.m. ET, which, by our estimate, is about 36% below the $251.02 record close of May 29, 2026.
CEO Cristiano Amon said the timing and shape of the Apple modem transition are fully built into the plan. The open question is whether the businesses replacing Apple can grow fast enough to justify the current price.
What Apple’s Exit Covers and Leaves in Place
Apple is switching to modems it designs itself, a move Qualcomm flagged long ago. Qualcomm’s new 10-K calls Apple historically one of its largest customers, and Apple and Samsung each made up 10% or more of fiscal 2026 revenue.
Apple also renewed its long-term patent license alongside Huawei and Transsion, so it leaves as a chip customer while staying on as a licensee. Amon said the next renewal cycle begins in fiscal 2030.
Sizing the Damage Against What Remains
GAAP revenue fell 8% to $10.322 billion from $11.27 billion, exceeding the $10.14 billion consensus. Non-GAAP revenue fell 7% to $10.442 billion, and a $120 million legal-settlement payment to a customer explains the gap.
Non-GAAP EPS of $2.17 inched past the $2.16 consensus but fell 28% from $3.00. Handset chip revenue dropped 26% to $5.137 billion, and a memory shortage is contracting the phone market regardless of Apple.
Automotive grew 89% to $1.99 billion, which Palkhiwala called its first $2 billion quarter. IoT rose 4% to $1.888 billion, and licensing fell 7% to $1.304 billion.
December-quarter guidance calls for revenue of $10.4 billion to $11.2 billion and non-GAAP EPS of $2.15 to $2.35. By our estimate, the $10.8 billion revenue midpoint beats the $10.56 billion consensus while the $2.25 EPS midpoint trails $2.29, so the weakness sits in earnings.
Reality Check on the Data Center Ramp
Qualcomm forecasts more than $650 million in December-quarter data center revenue and targets $5 billion for fiscal 2027, a $7 billion annual run rate by the end of that year and $15 billion by fiscal 2029. Custom accelerators only began shipping in October.
Amon said most of the fiscal 2027 total comes from two hyperscalers, one of which is Amazon (NASDAQ:AMZN). Palkhiwala called the AWS opportunity worth up to $60 billion over ten years, but that is a potential figure with no disclosed contract value, and he said supply would cap any upside. The expansion behind that number is also the trade we mapped in a free report on seven companies powering the AI boom that aren’t the chipmakers everyone already talks about.
The multi-year SpaceX deal supplies Starlink Mobile across tens of thousands of U.S. cell sites starting in 2027. Its value was not disclosed.
What Could Decide Qualcomm’s Next Move
Qualcomm has planned for the Apple chip loss, the license renewal keeps royalties from Apple coming in, and automotive is already a $2 billion quarterly business.
Palkhiwala said non-handset growth of more than 60% would more than offset the Apple decline and leave handsets under 50% of fiscal 2027 revenue. With shares this far below their May peak, much of the Apple damage looks priced in.
The risks are reliance on two data center customers and an earnings guide below consensus. The stock goes ex-dividend on Thursday, December 3.
The test is the fiscal first-quarter report. Data center revenue above $650 million and non-GAAP EPS inside $2.15 to $2.35 would confirm the case, and missing either one would break it.
Contact [email protected] for any questions or corrections.
Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
