Piper Sandler has reiterated an Overweight rating on Qualcomm (QCOM) and maintained a $200.00 price target after Qualcomm released results for its December 2026 quarter. That $200 target lines up with InvestingPro’s Fair Value estimate and implies the shares are trading below intrinsic valuation after the stock dropped more than 10% over the past week to $137.40, a level well under its 52-week high of $205.95.
The company posted a quarter that mixed beats on the top and bottom lines with a cautious outlook for the March quarter. While results for the reported period exceeded consensus, Qualcomm’s guidance for March was materially weakened by ongoing memory shortages, a dynamic Piper Sandler highlights as particularly acute among Chinese original equipment manufacturers that have trimmed their supply forecasts.
Despite the near-term demand pressure, Qualcomm’s balance sheet remains robust. The company reported liquid assets that exceed short-term liabilities and generated a free cash flow yield of roughly 9%, metrics the research firm cites as supporting the stock’s valuation backdrop.
Piper Sandler’s note emphasizes the handset business is expected to contract sharply in the March 2026 quarter, with a sequential decline of about 22%. At the same time, segments such as Automotive and Internet of Things continue to register stronger growth, providing offsetting revenue streams.
The firm does not forecast a substantive recovery in handset volumes through September 2027, citing the persistence of tight memory supply conditions. Piper Sandler also notes Qualcomm’s 2027 performance will be influenced by the company’s agreement with Apple, which the research brief flags as an additional factor in the outlook.
Looking ahead, Piper Sandler expects Qualcomm to use an upcoming analyst day to lay out further detail on its data center strategy and the timing of any ramp. The firm suggests that clearer disclosure on that front could lift consensus estimates. The $200 price target corresponds to approximately 18 times calendar year 2027 estimated earnings per share, according to the note.
In related financial results, Qualcomm reported first-quarter fiscal 2026 earnings that topped forecasts. The company delivered diluted earnings per share of $3.50 versus a $3.40 consensus and posted revenue of $12.25 billion ahead of an expected $12.11 billion. Nevertheless, guidance for the March quarter fell short of analyst expectations: Qualcomm projected revenue of $10.6 billion, representing a 13% sequential decline and a 2% year-over-year decrease. That revenue outlook was roughly 5% below the Street’s consensus of $11.1 billion, while the EPS guide of $2.55 was approximately $0.35 below analyst estimates.
Following the results and guidance, other sell-side firms adjusted their targets. RBC Capital trimmed its price target to $150 from $180 while retaining a Sector Perform rating, attributing the change to memory supply constraints that are squeezing smartphone production volumes. TD Cowen also cut its price target to $150 from $190 but kept a Buy rating, pointing to similar headwinds created by the memory shortage.
These analyst moves underscore the tension in Qualcomm’s near-term revenue profile: stronger-than-expected reported results in the quarter versus guidance and outlook that reflect significant challenges in the handset market due to constrained memory availability. At the same time, the company’s diversification into Automotive, IoT, and data center opportunities remains central to analyst expectations for longer-term growth and valuation support.
Key points
- Piper Sandler reiterates Overweight and a $200 price target on Qualcomm, aligning with InvestingPro’s Fair Value assessment.
- March guidance was weakened by memory shortages, with a projected 22% sequential decline in handset revenue for March 2026; Automotive and IoT continue to grow.
- QCOM reported fiscal Q1 2026 EPS of $3.50 and revenue of $12.25 billion, both above consensus, but guided March revenue and EPS below Street expectations.
Risks and uncertainties
- Persistent memory supply tightness that suppresses smartphone production and revenue - this impacts the mobile and broader semiconductor equipment markets.
- Near-term guidance shortfalls and analyst revisions could pressure the stock while clarity on data center ramp timing is pending - this affects investor sentiment in semiconductors and enterprise infrastructure sectors.
Summary
Piper Sandler’s note keeps an optimistic intermediate valuation view on Qualcomm, reflected in an Overweight rating and a $200 target, while recognizing material downside risk in handset volumes driven by ongoing memory shortages and softer March guidance. The company’s strong liquidity and free cash flow provide financial ballast, and continued growth in Automotive and IoT helps offset handset weakness. Analysts will be watching Qualcomm’s upcoming analyst day for further detail on its data center strategy and ramp expectations, which Piper Sandler says could lift estimates if the company provides clarity.