MW Qualcomm's stock falls as memory pressures hit outlook
By Britney Nguyen
Tech companies across the board are feeling the sting of memory-chip shortages, and Qualcomm just showed it's no exception
Qualcomm's stock was falling after it reported fiscal first-quarter results on Wednesday.
Supply shortages in the memory market have been a thorn in the side of many technology companies, and Qualcomm is feeling the pain as well.
The company $(QCOM)$ on Wednesday pointed to memory constraints as the culprit for its lower-than-expected guidance for the current quarter.
For its current fiscal second quarter, Qualcomm set revenue guidance at between $10.2 billion and $11 billion - falling short of the FactSet analyst consensus, which called for $11.1 billion.
The company's shares were sliding more than 9% in the extended session Wednesday.
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Qualcomm CEO Cristiano Amon said in a statement that momentum in the company's personal, industrial and physical AI segments is growing, but acknowledged that memory is in short supply and hitting the near-term outlook for its handset business.
Still, Amon said the company is "encouraged by end-consumer demand for premium and high-tier smartphones."
Qualcomm CFO Akash Palkhiwala noted that Qualcomm is indirectly impacted by the memory shortages. It doesn't buy memory, but its customers do.
With memory supply shifting more toward data centers and away from consumer electronics, customers are dealing with shortages as well as increased pricing on the memory capacity they can obtain, Palkhiwala said in a media briefing Wednesday. That means customers have been slowing down handset production as they readjust to the new supply reality.
The CFO said he expects handset sales to continue being impacted by memory shortages as the year goes on.
Meanwhile, Qualcomm is preparing to roll out two data-center chip-based accelerator cards starting later this year and into early next year. These are meant to address the increasing need for memory to support AI inference, or the process of running AI models.
Palkhiwala said he doesn't anticipate that current memory shortages will impact those chips, however, as the company had already locked in supply with its vendor before shortage issues arose.
"We're pretty comfortable that we'll have the supply that we need for the solutions we're building," he said.
Qualcomm reported revenue of $12.3 billion for the fiscal first quarter - up 5% from the previous year, and ahead of the $12.1 billion analysts tracked by FactSet had been expecting. The company reported adjusted earnings of $3.50 per share, which topped estimates for $3.39.
Leading up to the report, Cantor Fitzgerald analyst C.J. Muse was expecting March-quarter guidance to miss the consensus view due to memory constraints, and he was cautious about the June quarter as well. In fact, memory and other component shortages could negatively impact Qualcomm's business in China for the rest of the year.
Muse also worried about Qualcomm losing business with modem customers Apple $(AAPL)$ and Samsung Electronics (KR:005930), which are bringing more of that business in-house.
Bernstein analyst Stacy Rasgon said in a note before the earnings report that supply shortages for memory products "have not helped things" for Qualcomm's stock, which was down about 13% so far this year. He also noted the loss of Apple and a "general distaste of smartphones" as factors recently weighing on the company's shares.
But while Rasgon said he understood those concerns, he added there's still "value to be had under the surface," given Qualcomm's product portfolio and "an emerging AI story to boot." He believes those strengths will be easier to see as Apple becomes less a part of Qualcomm's business.
Qualcomm's stock might be the victim of expectations that are too high, Rasgon said, "but we still think the story is worth a look as the narrative grows cleaner through the year."
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-Britney Nguyen
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February 04, 2026 19:12 ET (00:12 GMT)
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