Buy the Dip in Qualcomm? Technicals and Earnings Point to Upside

Qualcomm (QCOM) reported robust Q3 2025 earnings, with revenue of $10.37 billion and EPS of $2.43, fueled by strong growth in automotive (+21%) and IoT (+24%) segments, validating its strategic diversification into new markets including data centers and wearable AI through key partnerships. The stock's technical outlook remains bullish, having found strong support at the $122 level (50% Fibonacci retracement), signaling potential upside and a reversal from recent corrections, positioning QCOM for continued leadership despite prevailing geopolitical and competitive pressures.

Analysis

Qualcomm's diversification strategy is yielding tangible results, as evidenced by strong Q3 2025 financial performance where revenue hit $10.37 billion and EPS reached $2.43, both surpassing expectations. Growth was primarily driven by the QCT segment's non-handset businesses, with automotive revenue climbing 21% year-over-year to a record $984 million and IoT revenue surging 24%. This performance validates strategic partnerships with firms like Xiaomi and Samsung and the planned acquisition of Alphawave Semi, which are expanding Qualcomm's footprint in high-growth areas like data centers and AI. While the core handset business grew a modest 7%, overall profitability improved significantly, with net income rising 25% to $2.666 billion and strong free cash flow of $2.581 billion underpinning a commitment to return 100% of FCF to shareholders in fiscal 2025. The technical outlook is equally compelling; the stock has found firm support at the $122 level, a 50% Fibonacci retracement of its long-term rally, and has formed bullish reversal patterns including a short-term inverted head and shoulders. A breakout above the $162 neckline could signal a move toward the $177–$182 resistance zone, reinforcing the positive fundamental narrative despite acknowledged geopolitical and competitive risks.

Key Decisions for Investors

• Consider the current price level near $122 as a strategic entry point, given the confluence of strong fundamental support and multiple bullish technical indicators suggesting a potential price reversal.
• Monitor for a decisive breakout above the $162 resistance level, which would confirm the inverted head and shoulders pattern and could serve as a trigger to increase positions, targeting the next resistance zone between $177 and $182.
• Investors should track the revenue growth in the automotive and IoT segments in upcoming quarters as a key performance indicator to validate that the company's diversification strategy remains on course.
• Incorporate risk management by recognizing that a failure to hold the $122 support could lead to further downside, with the next major support levels at $96 and then $70, which could represent subsequent long-term buying opportunities.