Qualcomm’s Q4 earnings surpassed expectations, with adjusted revenue of $11.27 billion; however, the stock fell 2%.

After the U.S. market closed on November 4th Eastern Time, Qualcomm released its financial report. In the third fiscal quarter, revenue reached $11.27 billion, a year-on-year increase of 10%, surpassing market expectations of $10.79 billion. Adjusted EPS was $3.00, also higher than the expected $2.88. The company projects first-quarter revenue of $11.8 billion to $12.6 billion, exceeding analysts’ expectations of $11.59 billion.

Although Qualcomm continues to emphasize its diversification strategy, smartphone chips still account for 62% of total revenue. In the third quarter, revenue from this segment was $6.96 billion, up 14% year-on-year. Facing growth bottlenecks in its mobile business, Qualcomm is betting on the automotive and IoT sectors.

Automotive chip revenue was $1.05 billion, representing a 17% year-on-year increase; IoT business revenue (including Meta’s VR/AR devices) was $1.81 billion, up 7%. While these numbers look good, their scale remains limited. The automotive segment accounts for only 9.3% of total revenue, IoT accounts for 16%, and together they are less than half the size of the smartphone chip business. After the release of the earnings report, Qualcomm shares fell 2.26% in after-hours trading.