Dividend investors have had a lot to cheer about so far in 2026. Even as the broader S&P 500 ($SPX) has remained in negative territory to start the year, dividend-focused funds like the iShares Core Dividend Growth ETF (DGRO) have quietly outperformed the market, returning more than 2% year-to-date (YTD) in early March as investors gravitated toward income names. stable.
In a market where protecting capital is as important as chasing profits, companies that continue to increase their payouts are making their confidence clear.
Qualcomm (QCOM) is now the latest chipmaker to join that group. On March 17, the San Diego-based semiconductor giant’s board of directors approved an increase in its quarterly cash dividend from $0.89 to $0.92 per share, a 3.4% increase, along with a new $20 billion share buyback authorization that adds to an existing $2.1 billion buyback plan.
That move came after QCOM had already given up more than 36% of its 52-week high, hit by a global memory supply crunch that has slowed smartphone production and weighed on near-term earnings forecasts.
With QCOM trading at a discount and the company now racking up a dividend increase on top of the largest buyback authorization in its recent history, is this a value investor’s dream setup, or does the pain stock have more room to run before a real bottom forms? Let’s find out.
Qualcomm is at the center of mobile and connected computing, designing chips and licensing key wireless patents that power smartphones, cars and a growing range of smart devices.
Over the past 52 weeks, that story hasn’t impressed the market, with QCOM stock falling about 17% and year-to-date down another 23%.
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That drop has left the stock looking relatively cheap. Qualcomm trades at about 15.44 times forward earnings, below the industry average of 21.59 times, suggesting investors are paying a lower multiple for the same dollar of expected earnings.
The dividend, however, seems like a clear statement. Qualcomm yields about 3.56%, with the most recent quarterly dividend of $0.89 per share, a forward payout ratio near 35%, and a 23-year streak of annual increases that puts it well ahead of the tech sector’s average yield of near 1.4%. Management doesn’t just return cash to shareholders; It does so from a solid financial base.
In the fourth quarter of fiscal 2025, Qualcomm generated $12.25 billion in revenue, up 5% year-over-year and slightly above estimates, with adjusted EPS of $3.50, beating expectations by about 3%. Adjusted operating income was $4.41 billion for a 36% margin, again a bit above forecasts, and free cash flow margin remained at a solid 36%, showing how much cash the company is wasting to fund those dividends and buybacks.
However, not all trends are favorable: Operating margin fell to 27.5% from 30.5% a year earlier, and guidance for the first quarter of 2026 was cautious, with revenue of around $10.6 billion and adjusted earnings per share of $2.55 at the midpoint, both below analyst expectations. Still, days of inventory fell sharply from 145 to 109, pointing to a better balance between supply and demand.
Qualcomm’s new full-stack robotics architecture is designed to run everything from home robots to full-size humanoids, bringing together hardware, software and composite AI into a platform that can turn prototypes into real machines in the field. The Qualcomm Dragonwing IQ10 series is the core of this effort, a high-performance, energy-efficient robotic processor aimed at autonomous industrial mobile robots and advanced humanoids, acting as the “brain of the robot” and extending Qualcomm’s cutting-edge AI roadmap directly into large-scale robotics.
On the data center side, the early completion of the Alphawave Semi acquisition aims to accelerate Qualcomm’s move beyond client and edge devices toward high-speed connectivity and computing within the data center. The Alphawave intellectual property and team, now led within Qualcomm by its co-founder and former CEO Tony Pialis, adds high-speed SerDes and interconnect technology that is vital to AI-heavy infrastructure.
In parallel, Qualcomm is using Adobe (ADBE) GenStudio to rebuild its content supply chain with generative AI, automating and scaling the creation, activation and measurement of thousands of marketing assets each week so its sales and marketing teams can better support and monetize these new AI and data center offerings.
For the current quarter, March 2026, analysts expect earnings of $1.89 per share, down from $2.35 a year ago, equivalent to a year-over-year drop of about 19.57%. The next quarter, June 2026, is set at $1.83 per share versus $2.29 last year, a drop of 20.09%. For the full fiscal year ending September 2026, Street expects EPS of $8.52 compared to $10.07 a year earlier, a drop of 15.39%, before a small recovery to $8.72 in fiscal September 2027, growth of just 2.35% from that lower base.
Bank of America recently reinstated coverage with an “underperform” rating and a $145 price target, pointing to the potential loss of Apple’s business and growing competition as key risks that could slow long-term growth.
Still, the group of analysts in general is more positive. Among 32 analysts, the stock has a consensus rating of “Moderate Buy,” and the average price target of $161.32 implies roughly a 23% upside from recent levels.
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For investors weighing Qualcomm’s 3.4% dividend increase, the setup looks like a cautious “yes, but know what you’re buying.” The company is clearly leaning toward shareholder returns with richer payout and a massive buyback, while burning enough cash to fund serious bets on robotics, data center connectivity and AI-powered marketing. All in all, QCOM probably works best for dividend growth and value-oriented technology investors who can ride out the volatility and wait a couple of years until the growth drivers are fully reflected in the numbers.
As of the date of publication, Ebube Jones had no (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. This article was originally published on Barchart.com
