Here’s What The Apple Patent Renewal Really Does For Qualcomm And Why I’m Buying

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I keep adding to my Qualcomm position, and last week’s Apple news sent me straight back to the buy button. The headline looks like paperwork. For me, it confirmed the whole reason I own this stock.

What the Apple Renewal Really Locks In

On September 24, 2026, Qualcomm (NASDAQ:QCOM) announced the renewal of its global patent license agreement with Apple (NASDAQ:AAPL), effective April 1, 2027. Neither side disclosed terms, but the timing tells the story.

Apple’s chip business with Qualcomm is winding down fast. In July, the CFO said Qualcomm’s share of the upcoming iPhone launch would be “materially lower than our prior estimate of 20%”, with Apple product revenue forecast to fall roughly 50% from the September to December quarter. Apple is building its own modems, yet it still pays to use Qualcomm’s patents. The licensing unit, QTL, brought in $1.28B last quarter at a 69% EBT margin. Apple can stop buying Qualcomm chips, but it keeps paying Qualcomm to use wireless technology. That is the core of my thesis.

Three Reasons My Buy Orders Keep Coming

First, growth beyond phones has already shown up. Automotive revenue hit $1.59B, up 61%, its 23rd straight quarter of double-digit growth. BMW named Qualcomm its lead compute silicon partner. Management expects non-handset growth to speed up from 24% in fiscal 2026 to greater than 60% in fiscal 2027, which it says “will replace the entire Apple product revenue within the year.”

Second, the company pays me to wait. In fiscal 2025, Qualcomm generated $12.82B in free cash flow and returned $12.60B to shareholders. The quarterly dividend rose from $0.89 to $0.92, and a new $20B buyback authorization sits behind it.

Third, the valuation still works on cash. The P/E of 35 looks steep, but a $5.7B non-cash tax charge distorted GAAP earnings. On cash, shares trade at 15.34 times free cash flow, a 6.52% free cash flow yield, alongside a 1.94% dividend yield. Net debt is just 0.61 times EBITDA.

Why My Money Skips Broadcom

Broadcom (NASDAQ:AVGO) is the obvious AI chip alternative, and its AI semiconductor revenue grew 221% last quarter. Investors already price that in. Its roughly $1.7 trillion market cap works out to about 43 times trailing four-quarter free cash flow by my math, against Qualcomm’s 15.34. Broadcom also lists dependence on a limited number of large AI customers and heavy debt among its risks. I prefer paying less for growth that is just starting.

Risk I Refuse to Ignore

Handsets remain the biggest line, and they fell 20% to $5.09B. Memory costs are pressuring phone makers, China exposure carries trade risk, and non-GAAP EPS of $2.21 missed the $2.22 consensus, ending a six-quarter beat run. Management expects Android revenue down 20% this year.

That pain is real. It still has not broken my thesis. Qualcomm is passing through double-digit price increases, says China revenue bottomed in the June quarter, and forecasts a double-digit sequential rebound.

Catalysts Keeping My Buy Button Active

Revenue from two hyperscaler custom silicon programs begins in the December quarter, data center revenue is targeted at $5 billion in fiscal 2027, and an Amazon data center collaboration followed in September. The stock slipped 7.15% over the past week to $184.10, and I treated that dip as a chance to add.

Apple is moving its chips in-house and still renewed the patent license, and I plan to remain a buyer while Qualcomm keeps collecting those royalties.

The post Here’s What The Apple Patent Renewal Really Does for Qualcomm and Why I’m Buying appeared first on 24/7 Wall St..