JPMorgan Downgrades Qualcomm Ahead of Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 7 hours ago
0mins
Should l Buy JPM?
Source: Yahoo Finance
- Earnings Risk Elevated: JPMorgan downgraded Qualcomm from Overweight to Neutral and cut its price target from $185 to $140, indicating rising pressures in its core handset business ahead of the earnings report, with QCT revenue expected to decline by 22% in 2026, significantly impacting profitability.
- Market Reaction Weak: Qualcomm's stock has fallen 22% year-to-date in 2026 and nearly 40% from its October peak, currently trading around $136, reflecting market concerns over its future earnings potential, particularly amid weakening smartphone demand.
- Core Business Challenges: Qualcomm's CDMA Technology unit remains its main profit driver, but risks from memory supply constraints and high customer concentration with Apple and Samsung threaten profitability, with QCT EBT margins expected to drop from 31% to 26%-28%.
- Limited Diversification Progress: Although Qualcomm has made strides in automotive and data center sectors, with automotive revenue growing 15% year-over-year to $1.1 billion in Q1 2026, these segments are still too small to offset declines in handset earnings, leaving investor confidence in future profitability fragile.
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Analyst Views on JPM
Wall Street analysts forecast JPM stock price to rise
19 Analyst Rating
11 Buy
7 Hold
1 Sell
Moderate Buy
Current: 309.950
Low
260.00
Averages
341.38
High
400.00
Current: 309.950
Low
260.00
Averages
341.38
High
400.00
About JPM
JPMorgan Chase & Co. is a financial holding company. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. The Company operates through three segments: Consumer & Community Banking (CCB), Commercial & Investment Bank (CIB), and Asset & Wealth Management (AWM). Its CCB segment offers products and services to consumers and small businesses through bank branches, ATMs, digital and telephone banking. Its CIB segment consists of banking and payments and markets and securities services, and offers a suite of investment banking, lending, payments, market-making, financing, custody and securities products and services to a global base of corporate and institutional clients. AWM segment offers investment and wealth management solutions. It offers multi-asset investment management solutions, retirement products and services, brokerage, custody, estate planning, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Limited Diversification Progress: Although Qualcomm has made strides in automotive and data center sectors, with automotive revenue growing 15% year-over-year to $1.1 billion in Q1 2026, these segments are still too small to offset declines in handset earnings, leaving investor confidence in future profitability fragile.
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- Dollar-Cost Averaging: Dollar-cost averaging involves regularly purchasing stocks or index funds at different price points, helping investors maintain a consistent investment rhythm amidst market volatility, making it suitable for long-term investing.
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- Market Reaction Weak: Qualcomm's stock has fallen 22% year-to-date in 2026 and nearly 40% from its October peak, currently trading around $136, reflecting market concerns over its future earnings potential, particularly amid weakening smartphone demand.
- Core Business Challenges: Qualcomm's CDMA Technology unit remains its main profit driver, but risks from memory supply constraints and high customer concentration with Apple and Samsung threaten profitability, with QCT EBT margins expected to drop from 31% to 26%-28%.
- Limited Diversification Progress: Although Qualcomm has made strides in automotive and data center sectors, with automotive revenue growing 15% year-over-year to $1.1 billion in Q1 2026, these segments are still too small to offset declines in handset earnings, leaving investor confidence in future profitability fragile.
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- Earnings Per Share Beat: The earnings per share came in at $17.55, exceeding Wall Street's forecast of $16.49, which pushed the return on equity to 19.8%, reflecting improved operational efficiency within the firm.
- Asset Management Growth: The Asset and Wealth Management unit generated $4.08 billion in revenue this quarter, a 10% increase from last year, although slightly below market expectations, indicating growth in management fees due to an increase in total assets under management.
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- Earnings Per Share Beat: The bank's earnings per share reached $17.55, surpassing the expected $16.49, which pushed the return on equity to 19.8%, demonstrating high operational efficiency and potentially attracting more investor interest.
- Asset Management Growth: Goldman’s Asset and Wealth Management unit generated $4.08 billion this quarter, a 10% increase from last year, although slightly below Wall Street targets, reflecting increased management fees due to asset growth.
- Market Volatility Impact: While FICC revenue fell by 10%, equity revenue surged by 27%, indicating that Goldman's equity trading business thrived amid market volatility and high trading volumes, potentially setting the stage for future profit growth.
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