Qualcomm's (QCOM) fiscal Q3 results were mostly in line, but margin pressures and custom silicon uncertainty remain key challenges, RBC Capital Markets said in a note Thursday.

Analysts said the company is facing margin pressure from higher component costs, though management is taking pricing actions and expects margins to improve in the coming quarters.

On a positive note, the investment firm said China Android demand appears close to a bottom while Apple (AAPL) is now mostly removed from its 2027 model.

Data center custom silicon ramps remain on track, with management reiterating its target of $5 billion in data center revenue by fiscal 2027, though that goal may be "aggressive" given the nature of custom ASIC projects, according to the note.

The firm said it is lowering its fiscal 2026 earnings per share estimate to $10.52 from $10.85, and fiscal 2027 EPS estimate to $10.57 from $11.61.

RBC Capital Markets lowered its price target to $160 from $250, and kept a sector perform rating on the stock.

Shares of Qualcomm were down 1.9% in Thursday trading.

Price: 152.73, Change: -2.95, Percent Change: -1.89