In a market where protecting capital is as important as chasing profits, dividends feel like a steady paycheck. They offer investors a tangible return, even when price action becomes volatile. And when a company continues to increase that payout, it usually means that management feels confident about the visibility of earnings and the strength of the company’s balance sheet; Basically, things are going well behind the scenes. It reflects disciplined cash flow management, healthy liquidity and suggests there is enough left after running the business to reward shareholders. Not all companies can achieve this consistently.
That brings us to Qualcomm Incorporated (QCOM), the chipmaker powering modern connectivity. The company just increased its quarterly dividend to $0.92 per share, up 3.4% from its previous dividend of $0.89, payable in June. It’s not a huge jump, but it reflects management’s confidence.
Qualcomm rose to prominence by enabling the technology in everyday connected devices, taking advantage of artificial intelligence (AI) and the 5G wave. But the stock has fallen 19.62% in 2026, pressured by weak smartphone demand amid a global memory glut and weak near-term outlook.
While its valuations are cooling and dividends are inching higher, is this a good time to buy the dips or does QCOM have more room to fall?
Qualcomm, headquartered in San Diego, California, is a fabless semiconductor company powering much of the connected world. It operates through its Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL) and Qualcomm Strategic Initiatives (QSI) segments, combining chip innovation with technology licensing and strategic investments. Currently, its market capitalization stands at $145.3 billion.
Best known for its Snapdragon processors and 5G modems, QCOM is found inside everything from smartphones to smart homes and even connected cars. After four decades in the game, the company is now delving into AI-powered computing, energy-efficient performance, and advanced wireless technology. With platforms like Dragonwing, it is also expanding beyond consumer devices into enterprise and industrial markets, aiming to remain relevant as computing spreads everywhere.
QCOM stock has had a pretty rough run this year. The stock is almost 33% below its 52-week high of $205.95 from last October. Over the past year, it hasn’t done much, but the real damage came more recently: a drop of around 10.76% over the past three months and 19.62% year-to-date (YTD).
In early January, QCOM was trading comfortably above $180. It has now fallen below $140, basically erasing a large portion of the gains it had accumulated over the past few years and returning to levels seen around 2020. A softer-than-expected outlook on its latest earnings report didn’t help either. It raised new concerns about how much growth Qualcomm can achieve beyond the smartphone market, which still drives a large part of its business. Investors have seen this story before and patience seems to be wearing thin. Furthermore, a more cautious tone from analysts had increased the pressure.
However, it’s not all one-way traffic. Some technical signs suggest that things could be calming down a bit. The 14-day RSI, which was in oversold territory in February, recovered to 63.30, hinting that the strong selling may be fading. At the same time, the MACD oscillator has turned positive and momentum is starting to lean slightly bullish. It’s early, but there are signs that the slide may be losing steam.
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After the recent drop, QCOM stock is starting to become much more reasonably priced. It now trades at 12.29 times forward adjusted earnings, cheaper than its sector peers and even below its own five-year average. That shift alone is drawing the attention of value-focused investors.
And if investors like to get paid while they wait, Qualcomm has been pretty consistent. It has increased its dividend for 22 consecutive years. The latest 3.4% increase brings it to $0.92 per quarter, or $3.68 per share on an annualized basis, with a forward yield of 2.65%. Additionally, the company’s forward payment ratio is approximately 29%, so there is still room to continue making those increases.
Qualcomm started the year on a stable note. On February 4, after the market closed, the company reported first-quarter fiscal 2026 results, with revenue of $12.3 billion, up 5% year-over-year, and adjusted earnings per share of $3.50, up 3% year-over-year. Both figures slightly exceeded consensus expectations.
Performance across all segments remained balanced. The high-margin QTL licensing business generated $1.6 billion, supported by improved volumes and a favorable mix. Meanwhile, the core QCT chip segment contributed $10.6 billion. Mobile revenue hit a record $7.8 billion, driven by premium smartphone launches. IoT revenue increased 9% year-over-year to $1.7 billion, while automotive increased 15% year-over-year to $1.1 billion, reflecting continued adoption of Snapdragon Digital Chassis platforms.
Additionally, Qualcomm maintained strong capital returns, distributing $3.6 billion through dividends and share buybacks. The company ended the quarter with $7.2 billion in cash and generated $5 billion in operating cash flow.
But this is where the mood changed. The outlook for the second quarter was weak. Management guided revenue to between $10.2 billion and $11 billion, and adjusted EPS is estimated to be between $2.45 and $2.65, both below what the Street wanted. The cautious guidance caused the stock to drop 8.5% in the following session.
Near-term challenges persist, particularly in the global memory market, where demand for AI-powered data centers is tightening supply and driving up smartphone costs. Additionally, Chinese device makers are moderating production and inventory levels. While management remains confident in underlying demand for mobile devices, near-term weakness is expected, with second-quarter QCT device revenue projected at around $6 billion.
Everything is ready for the company to publish its second quarter results on Wednesday, April 29, after the market closes.
Analysts currently predict that Qualcomm’s second-quarter earnings per share will decline 19.6% year over year to $1.89. Looking ahead, EPS is expected to fall 18.1% year-on-year to $8.25 in fiscal 2026, but then rise marginally to $8.26 in fiscal 2027.
Following Qualcomm’s first quarter report, several brokerages have expressed caution about QCOM stock. And now, ahead of its second-quarter report, JPMorgan is getting a little cautious on the company, downgrading QCOM stock to “Neutral” and cutting its target to $140. The concern is continued pressure on the mobile phone business, from memory limitations to weak demand from China and a heavy reliance on a few key customers, while new growth segments are not yet large enough to fully offset the drag.
Overall, Wall Street rates QCOM stock a “Hold,” downgrade from a “Moderate Buy” a month ago. Of the 33 analysts covering the stock, nine suggest a ‘Strong Buy’, one recommends a ‘Moderate Buy’, 19 analysts are playing it safe with a ‘Hold’ rating, two have a ‘Moderate Sell’ and the remaining two rate it a ‘Strong Sell’.
Based on its average price target of $157.23, QCOM stock has a 14% upside potential from current levels. His $205 price target, the highest on the street, implies the stock could rally as much as 48.6% over the next 12 months.
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Right now, Qualcomm is in that middle zone: it’s not broken, but it’s definitely not sailing either. The stock has taken a notable hit and near-term growth still looks a bit shaky, especially with the pressure on its core mobile phone business. But the bigger picture hasn’t really fallen apart.
The company continues to generate solid cash, remains profitable, and continues to expand into areas such as automotive, IoT, robotics, and data centers. Those pieces are not yet fully reflected in earnings, but they are clearly being built.
The recent dividend increase brings some comfort, as it shows that the company is not stressed for cash and is willing to continue rewarding shareholders. Still, this is not an obvious purchase. If one expects a quick rebound, the stock could test patience and the current volatility may not be your friend.
However, for long-term value-oriented investors who may face some bumps along the way, the recent decline may start to look attractive. For others, it may be wiser to stay on the sidelines until there is clearer stability and momentum.
On the date of publication, Sristi Suman Jayaswal had no positions (either directly or indirectly) 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
