#QualcommAndArmEarningsInFocus

Two chip companies report on the same evening, and their business models are very different. Qualcomm sells the chips inside phones, cars and connected devices. Arm licenses the chip designs its partners build on and earns royalties on every unit shipped. Both report after the US close on Wednesday, 4 November 2026. The question is whether AI and data-center demand can offset a weak smartphone cycle and justify valuations that already look full.

Where the stocks stand

Data as of the 3 November 2026 US close (feed updated 01:58 UTC on 4 November):

- Qualcomm (QCOM): $164.43, up $2.35 or 1.45%. Previous close $162.08. Volume about 11.4 million shares, turnover about $1.87 billion.
- Arm (ARM): $202.49, up $5.70 or 2.90%. Previous close $196.79. Volume about 3.5 million shares, turnover about $0.71 billion.

Both stocks are far below their 52-week highs. QCOM's high was $257.56, so it trades about 36% lower. ARM's high was $452.70, so it trades about 55% lower. Both fell roughly 10% on 30 October during the sector sell-off. Extended-session prints were mixed: QCOM traded near $163.36 after hours, down 0.65%, and ARM near $204.88, up 1.18%. These are thin prints, so don't read much into them.

Qualcomm: the last reported quarter and the guide

In its most recent reported quarter, fiscal Q3 2026, Qualcomm posted revenue of about $9.95 billion, slightly above the $9.69 billion estimate in the data feed. Reported EPS was $1.89 against a $2.23 estimate. The feed does not confirm that both EPS figures use the same basis, so treat that gap with caution. Revenue beat and EPS missed, and that mix makes the stock sensitive to guidance.

For the fiscal Q4 report due tonight, Qualcomm guided revenue to $9.7 to $10.5 billion and adjusted EPS to $2.05 to $2.25, according to 24/7 Wall St. Year-ago EPS was $3.00, so the guide points to a year-over-year decline. Handset weakness is the main drag. Qualcomm also signaled a sharp sequential drop of about 50% from the September to December quarter. Handsets remain Qualcomm's largest revenue pool, so that decline matters most.

On valuation, Qualcomm screens moderately. Trailing P/E is about 18.8, P/E on the feed's basis is about 32.8, and price-to-book is about 6.2. Market value is about $172.7 billion, and trailing dividends of $3.59 per share imply a yield of about 2.2%.

Arm: licensing and royalties on a premium multiple

Arm's model is different. It licenses CPU designs and earns royalties on chips shipped by partners in smartphones, data centers and automotive. It does not carry manufacturing risk, and it can grow as its designs appear in more devices. That high-margin model is why the market pays a premium.

The premium is large. Arm's trailing P/E is about 207, its P/E on the feed's basis is about 238, and its price-to-book is about 25. Market value is about $216 billion. At those levels, the stock needs sustained royalty growth and data-center design wins to justify the price.

I could not verify Arm's most recent quarterly revenue, EPS, royalty growth or guidance. The feed's latest Arm entry is incomplete and does not confirm the period, so I am not quoting those figures. Check tonight's release before drawing conclusions about Arm's operating performance.

Smartphones, cars and IoT

Qualcomm's handset chips are its largest exposure, and that business faces pressure from memory costs and weak device demand. Automotive and IoT are smaller but growing, and they offer a second revenue leg if the phone cycle stays soft. Qualcomm's licensing business (QTL) collects patent royalties and is less tied to chip volume. Investors will want to see how each line performed and whether the company has a clearer path to AI PCs and edge AI devices.

Arm's exposure is broader across the industry, covering smartphones, data centers, automotive and AI accelerators. Arm is therefore a bet on the overall compute cycle more than on any single device.

Can AI and data centers carry the rally?

AI connects these two stories. Qualcomm is trying to bring AI into phones, PCs and edge devices. Arm is trying to win more of the data-center and AI server market with its CPU designs. If AI workloads move from the cloud to devices, both companies could benefit. If AI spending stays concentrated among a few large buyers, Qualcomm's gain will be limited, and Arm's premium depends on that concentration continuing.

The key test tonight is not the headline number. It is whether management ties AI to revenue that shows up over the next two or three quarters, and whether it can explain the handset decline without guiding to a deeper drop.

Key risks

1. Smartphone demand: A steep sequential handset decline into December would weigh on Qualcomm's guide and sentiment.
2. Memory costs: Higher memory prices can squeeze device makers and slow unit volumes.
3. Competition: Arm's partners are developing their own designs, and Qualcomm faces rivals in phones and PCs.
4. Valuation: Arm's multiple leaves little room for a miss. Qualcomm's lower multiple gives more room, but its guide is weak.
5. Post-earnings volatility: Both stocks have moved sharply on sector news, so expect large moves after the release.

Bottom line

Qualcomm is a diversified chip business with a weak holiday-quarter guide and a more reasonable valuation. Arm is a high-margin licensing model priced for strong AI and data-center growth. Both depend on whether AI demand reaches beyond a few large buyers.

Wait for tonight's numbers, the guidance and the after-hours reaction before drawing conclusions. Size positions for a large move in either direction.

Risk note: This is market education, not investment advice. Stocks can move sharply after earnings, and the figures above are a snapshot that may change.