Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 2 Jun 2026
QCOM· Technology
Qualcomm
Qualcomm owns the wireless toll booth, yet its earnings just fell while the price climbed to 26 times profit.
Buffett fit
Strong fit
Owner
83
Durability
51
Management
88
Price
36
Score updated 26 Sept 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole company, I would be glad of a business that earns a 20.1 percent and converts profit into cash at better than two to one, with at 2.31 times net income.
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Here is where I get cautious. Earnings per share have shrunk at 10.8 percent a year over the period measured, and at one point fell 44 percent peak to trough.
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Management has behaved like owners. The share count has shrunk about 0.8 percent a year, debt is modest at 0.56 times equity, interest is covered nearly 17 times over, and the current ratio sits at a comfortable 2.37.
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This is where the case falls apart. At a ratio of 26.1 and an owner-earnings yield of just 5.0 percent, I am being asked to pay up for a business whose earnings have been shrinking, not growing.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1Wide at 83, built on switching costs and a licensing book that taxes nearly every cellular device sold
- 2Excellent profitability with a 54.8 percent and a 25.5 percent
- 3Returns on invested capital of 20.1 percent trailing and 26.1 percent over five years, well above the cost of capital
- 4Cash machine: runs at 2.31 times reported net income
Concerns
7- 1Valuation is the headline problem: at a 26.1 and a 5.0 percent owner-earnings yield, you pay a premium for declining earnings
- 2Earnings per share have shrunk at 10.8 percent a year, the opposite of what the price implies
- 3Earnings fell as much as 44 percent peak to trough, exposing real cyclicality beneath the
- 4Durability scores only 51, the weakest pillar by far, reflecting royalty erosion as patents age
Price history
$178+35.2%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Qualcomm makes its money two ways: it sells the Snapdragon chips that run most of the world's premium Android phones, and it collects a royalty on nearly every cellular device made, whether the maker buys its chips or not. That licensing arm is the crown jewel, and it shows in the 54.8 percent and the 25.5 percent . The trouble is that handset volumes grow slowly, with revenue at just 7.2 percent a year.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 22, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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