Key Takeaways
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Brad Gerstner's Altimeter Capital bought 1.88 million Qualcomm ( QCOM:NASDAQ )shares in the quarter ended June 30, while Distillate Capital Partners, which manages $2.1 billion, sold its whole stake.
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Qualcomm is down 12% since June 30, and analysts expect its earnings to fall in fiscal 2026 and again in fiscal 2027 before recovering in fiscal 2028.
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At 17x forward earnings, the stock trades above its five-year average of 14x, though analysts' average target is 21% above the last close.
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For now, the seller has the stronger case on the numbers. Qualcomm's Nov. 4 report is the next test of the data center plan behind the bull case.
Qualcommis 38% below its 52-week high, and two funds' latest 13Fs show them on opposite sides of it.
Brad Gerstner's Altimeter Capital bought in during the quarter ended June 30, while Distillate Capital Partners, which manages $2.1 billion, sold every share.
Both 13Fs cover that quarter and were filed Aug. 14, so they show where things stood four months ago.
The September-quarter filings are due by Nov. 16, and Qualcomm reports its fiscal Q4 after the close on Nov. 4.
Gerstner bought, Distillate sold it all
Altimeter manages $18.75 billion. Its 13F for the June quarter shows 1.88 million Qualcomm shares worth $348 million on June 30. It was a new position, 3.5% of its 13F holdings, and its 11th-largest of 20.
Distillate held 253,567 shares worth $33 million on March 31, which was 1.7% of its 13F holdings at the time. Its June 30 filing shows none.
Qualcomm is down 12% since June 30, so the sale looks better so far. But from March 31, the last quarter-end when Distillate's filings show it holding the stock, Qualcomm is up 29%.
A 13F doesn't show what either fund paid or got, or whether Altimeter still owns the stock today. What Qualcomm earns from here matters more than either price.
TIKR tracks 38 analysts on Qualcomm. How many say "Buy"?
See the full breakdown of Buy, Hold, and Sell ratings on Qualcomm, along with Wall Street's revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Qualcomm's Analyst Ratings
Earnings have to fall before they rise
The bear case starts with phones, which made up 72.5% of Qualcomm's chip revenue in fiscal 2025.
Apple is moving to its own modems, and management expects its Apple revenue to fall by about half from the September quarter to the December quarter.
The memory shortage has also cut Android phone builds, and management says it will cost more than $1.50 of EPS in fiscal 2026.
Analysts expect normalized EPS to fall from $12.03 in fiscal 2025 to $10.17 in fiscal 2027, and to climb back above fiscal 2025's level only in fiscal 2028:
The squeeze could also last longer than that.
Intel warned on Oct. 30 that it sees industry PC units falling about 12% in 2026 and another 10% in 2027 as memory shortages push prices up, and phone makers compete for the same memory.
A premium price for shrinking earnings
Even after the drop, Qualcomm trades at 18x forward earnings, above its five-year average of 14x:
That's down from 26x at the May peak, but investors are still paying more than usual for earnings that analysts expect to shrink.
Wall Street is more upbeat. Thirty-seven analysts cover Qualcomm, and their average target of $196 is 21% above the last close. A year ago it was around $180:
That average has come down from $223 on July 15, and the targets run all the way from $100 to $400. Analysts can't agree on this stock either.
Distillate has the numbers on its side
Margins are moving the wrong way, too. Qualcomm's chip unit earned a 30% pre-tax margin in fiscal 2025 and 26% in the June quarter, and management guides to 23% to 25% for September.
CEO Cristiano Amon has also outlined worldwide job cuts , with notifications starting in November.
If I had to pick, I'd side with the seller. Earnings are expected to shrink through fiscal 2027, and the data center business that's supposed to replace them has barely started. Its revenue rose $ 182million in the nine months to June, mostly from the Alphawave acquisition. Management's target for fiscal 2027 is $5 billion.
Gerstner's side has real support, though. Management says custom chips for two hyperscalers have purchase orders and will start shipping in the December quarter.
Qualcomm also signed an up-to-$60 billion deal with Amazon in September, and it's targeting more than $18 of non-GAAP EPS in fiscal 2029. If it gets there, 18x will look cheap.
Nov. 4 is the next test. If Qualcomm guides December-quarter revenue above September's and puts a dollar figure on data center sales, I'd give Gerstner the edge.
Altimeter's next 13F will show us whether he's still holding.
So what is Qualcomm stock actually worth?
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