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QCOM · Forward model · QCT IoT · Bear case

What has to happen in QCT IoT

Model as of

This page changes QCT IoT inside the complete QCOM model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

QCOM forward model
Horizon
Consolidated fair value $83.15 all other verticals held in this portfolio case
Final-quarter revenue $2.25B 23% of company revenue
Explicit segment contribution $4.89B EBITDA less segment capex, before corporate items

Apple insourcing runs faster than the guided December step implies and takes the residual share to near zero across fiscal 2027 and 2028, while the data-centre ramp slips past fiscal 2027. Handsets fall through $4B a quarter and the QCT EBT margin, already down four points year over year on wafer, packaging and memory input costs, compresses further under the 1.5 to 2 point gross-margin drag management says the data-centre ramp itself carries. The exit multiple derates with the growth story.

QCT IoT

Basis quarter$1.83B
Final quarter$2.25B
Implied CAGR+5%
Final revenue mix23%

Personal AI and compute devices including Snapdragon X PC platforms and XR, plus industrial, networking and robotics silicon under the Dragonwing brand. A recovery-plus-mix line rather than a cyclical one, and the least-evidenced leg of the $40 billion non-handset target.

Last four quarters
2025 Q4 $1.81B Reported
2026 Q1 $1.69B Reported
2026 Q2 $1.73B Reported
2026 Q3 $1.83B Reported
Consumer IoT / personal AI and compute (including PCs and XR)Industrial IoT, networking and roboticsDragonwing edge platforms
Sequential growth +2.4%/qtr decaying toward +3.0% 2.4% sequential, the pace of the last three printed quarters (1,688 to 1,726 to 1,830), not a target-implied rate.
QCT IoT

Latest: $2.25B (2030Q3E)

Period Value
2023Q3 $1.49B
2023Q4 $1.38B
2024Q1 $1.14B
2024Q2 $1.24B
2024Q3 $1.36B
2024Q4 $1.68B
2025Q1 $1.55B
2025Q2 $1.58B
2025Q3 $1.68B
2025Q4 $1.81B
2026Q1 $1.69B
2026Q2 $1.73B
2026Q3 $1.83B
2026Q4E $1.85B
2027Q1E $1.86B
2027Q2E $1.89B
2027Q3E $1.91B
2027Q4E $1.93B
2028Q1E $1.96B
2028Q2E $1.98B
2028Q3E $2.01B
2028Q4E $2.04B
2029Q1E $2.07B
2029Q2E $2.10B
2029Q3E $2.13B
2029Q4E $2.16B
2030Q1E $2.19B
2030Q2E $2.22B
2030Q3E $2.25B

Assumptions & reasoning

  • Seasonality tested and NOT carried. The two positions with any apparent signal are the two with the largest spread - December 0.293 and September 0.310 - and fiscal 2023 inverts the sign of both, with the December factor running 1.133, 0.839 and 0.936 across the three windows. Fiscal 2024, 2025 and 2026 all rise through the fiscal year, but that is inseparable from the secular recovery off the fiscal 2023 inventory drawdown. Two upward-trending windows cannot separate season from trend.
  • The 2.4% first step continues the sequential pace of the last three quarters (1,688 to 1,726 to 1,830) rather than reaching for the target. Management's 'More than $14 billion by fiscal 2029' against roughly a $7.0 billion fiscal 2026 needs about 19% compound annual growth from a line that just delivered 9% year over year; this base case deliberately lands well short of it and the bull case is where the target lives.
  • The one disclosed forward datum here is a pipeline, not revenue: Amon on the fiscal 2026 Q3 call said the 'industrial design win pipeline exceeds $7 billion with over $3.5 billion in design wins secured this fiscal year'. Design wins are neither dated nor contracted revenue, so they inform the terminal rate rather than driving it.
  • No unit or attach-rate disclosure exists for IoT; the 10-Q attributes growth only to 'an increase in revenues per unit primarily driven by favorable mix'. A growth rate off the disclosed revenue base is the only honest driver kind.
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