Qualcomm (QCOM) reported strong Q4 results but growth could slow in fiscal Q2, BofA Securities said in a note Thursday.

The note said the results were partly driven by handset demand in China thanks to product launches and holiday timing. It added that some of the strength is cyclical and potentially short-lived.

"The intermediate term looks somewhat challenged with unsustainable handset trends, and we expect strength to slow in 2Q26," the report said.

Chinese vendors made up about 68% of Qualcomm's handset-related QCT sales, and there are signs of self-development at Xiaomi, the report said. It added that Samsung share is expected to decline in fiscal Q2 to 75% from 100%, and Apple (AAPL) contract ending in about one year.

"As IoT, Auto, and Data Centers ramp, the stock multiple should expand, but handset concentration is the key transitory risk," the note said.

BofA raised its price target to $215 from $200 while maintaining its buy rating.

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