$QCOM daily pick: sell Dec 18 $135 put (buy-side) after the 12% earnings drop

$QCOM: I'm selling the Dec 18 $135 put on @Qualcomm after an 11.7% drop on its earnings report.

Live at 12:17pm ET ($153.02):
10% under the 200-day
About 15x fiscal 2027 EPS estimates
$4.30 credit, breakeven $130.70
About 3.2% in 43 days (~27% annualized)

I think the selloff is overdone because the weak spot is phones squeezed by memory costs while automotive revenue grew 89% to a record $1.99B.

Not financial advice

---

What happened: adjusted EPS of $2.17 beat by a penny, but handset revenue fell 26% to $5.14B and the first quarter EPS guide of $2.15 to $2.35 has a midpoint below estimates. Rising memory prices are pushing phone prices up and demand down.

---

Why a put and not the stock: implied volatility is about 58% after the drop, so the premium is rich. The $135 strike is under the August low of $142.89 and 11.8% below the current price. If I get assigned I own Qualcomm at $130.70 net, about 15% under today's price.

---

The risk: if the handset market keeps shrinking and the stock goes back to the April low of $121.99, I own shares at a loss. A smaller version is the Dec 18 135/125 put spread for $1.74, which caps the risk at $826.

---

What I'd watch: Qualcomm guided data center revenue above $650M this quarter and kept its $5B target for fiscal 2027. The Dec 18 expiry comes before the next report (FMP lists Feb 3), so earnings are not inside this trade. The $0.92 quarterly dividend works out to about 2.4% a year at this price.

Sources: CNBC: Qualcomm sinks after earnings, handsets -26%, light guide · CNBC: Qualcomm Q4 2026 results, EPS $2.17 vs $2.16, Q1 guide · Reuters via Investing.com: handset revenue -26% to $5.14B · Quartz: auto +89% to record $1.99B, $5B FY27 data center target · Converge Digest: $650M+ Q1 data center, $5B FY27, auto $1.99B · The Verge: ~$650M Q1 data center revenue, $5B by end of FY27

Not financial advice. For informational and educational purposes only.