Qualcomm shares were falling on Wednesday afternoon after the chip maker reported fiscal third-quarter earnings that fell short of Wall Street estimates, but better-than-expected revenue.

Shares were falling more than 9% in late Wednesday trading, after falling 4.4% to $155.68 in regular trading.

For its fiscal third quarter ended June 28, Qualcomm reported adjusted earnings of $2.21 a share on revenue of $9.9 billion.

Analysts had expected adjusted earnings of $2.24 a share on revenue of nearly $9.7 billion.

Qualcomm said its combined QCT Automotive and Internet of Things revenue grew 28% from a year ago, and that its QCT Automotive revenue had posted 23 consecutive quarters of double-digit growth from the year before.

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Qualcomm, the maker of chips that power smartphones, tablets, and gaming devices that has been steadily expanding its AI portfolio, will report financial results for its fiscal third quarter on Wednesday afternoon.

Barron's has reported that in a relatively short period of time, the chip maker has put together an AI data center tech stack that looks a little like Nvidia's, as it aims to diversify away from its core market, mobile phones. Investors will want to hear more about that.

For its fiscal third quarter ended in June, Wall Street expects the San Diego-based company to report adjusted earnings of $2.24 per share on revenue of nearly $9.7 billion.

Analysts project $8.3 billion for Qualcomm CDMA Technologies, including $5.1 billion for handsets, and $1.5 billion for automotive, according to FactSet.

Qualcomm shares closed down 4.2% to $162.88 on Tuesday, its lowest close since April 29, and its largest percentage decline since June 26, according to Dow Jones Market Data. The stock is down 4.8% so far this year through Tuesday's close and down 0.5% over the past 12 months.

Cody Acree, senior semiconductor research analyst for Benchmark Equity Research/StoneX, has a Buy rating and a $300 price target for the stock.

Acree expects revenue of $9.675 billion and adjusted earnings per share of $2.23, saying "Our mix is more cautious in Handsets, offset by modest upside in Automotive, IoT and QTL."

Handsets is a reference to smartphones. Qualcomm has said it expects handsets to make up only one-third of its revenue by fiscal 2029, down from 72% in fiscal 2025.

Automotive refers to automotive chip sales, and IoT stands for Internet of Things, the network of physical objects that connect and exchange data with other devices and systems over the internet. QTL stands for Qualcomm Technology Licensing, which grants licenses and provides rights to use portions of the company's intellectual property portfolio.

Acree says three key questions are whether China Android revenue reached its June trough and returns to sequential growth; whether reported September price actions protect Qualcomm CDMA Technologies margins without causing another customer build reduction; and whether management adds tangible evidence behind its $5 billion FY27 data-center target.

"The stock is positioned better for an in-line result than it was immediately after Investor Day, but a simple beat may not be enough," Acree wrote.

The most constructive combination would be a clean June print, September-quarter revenue at or above $10.2 billion, QCT margin near 30%, a visible China Android recovery, and unqualified reaffirmation of the FY27 data-center target, he said.

Acree says Qualcomm's September outlook should carry more weight than the June print, and expects revenue of $10.2 billion, above the Street's $10 billion, and adjusted earnings per share of $2.36, similar to the consensus EPS of $2.37.

"The revenue difference is favorable, while EPS is similar because data-center investment, consumer mix and the timing of cost recovery still constrain near-term conversion," Acree says.

Qualcomm revealed at its June 24 investor day that Meta Platforms will use its Dragonfly C1000 central processing units when they become available in 2028. Microsoft's Azure cloud division will use Qualcomm's High Bandwidth Compute (HBC) chip architecture, expected in mid-2027.

Qualcomm CFO Akash Palkhiwala told Barron's last month that the HBC packaging of logic and memory components can deliver high performance and bandwidth at low power.

Qualcomm also raised its non-handset revenue target for fiscal 2029 to $40 billion, nearly double its previous guidance of $22 billion, and said it also expects $15 billion in data center sales by that point.

Qualcomm also said it had agreed to buy artificial-intelligence infrastructure software company Modular in a $3.9 billion stock deal to bulk out its AI portfolio. Modular brings software for AI inference and has developed an AI programming language that could be a competitor to Nvidia's dominant CUDA.

"While we're coming in late, we're coming in with technology advantages and something unique that solves the problems that these companies have, " Palkhiwala said.

Qualcomm on July 17 announced a quarterly cash dividend of 92 per common share, payable on Sept. 24, to stockholders of record at the close of business on Sept. 3.

Qualcomm management will discuss third-quarter results during a conference call at 4:45 p.m. Eastern on Wednesday.