NEW YORK, February 5, 2026, 04:45 EST — Premarket
- Qualcomm shares dropped roughly 11% in premarket trading following a weaker-than-expected forecast for the March quarter.
- Management linked the outlook to memory supply bottlenecks and rising prices weighing on handset production, particularly in China.
- Investors want to see if the bottleneck clears ahead of the next earnings update on May 6.
Qualcomm Incorporated (QCOM.O) shares dropped 11.1% to $132.34 in premarket trading Thursday, following a forecast that missed revenue and earnings estimates amid a global memory-chip shortage. The stock had closed Wednesday at $148.89.
The outlook is hitting a market already on edge over consumer electronics demand. Qualcomm, a major supplier for premium smartphones, often sets the tone with its guidance, giving a quick snapshot of what phone makers can realistically produce and ship soon.
On the earnings call, CEO Cristiano Amon warned that memory shortages and price hikes could “define” the handset industry’s scale throughout the fiscal year. He noted memory suppliers are shifting capacity to high-bandwidth memory for AI data centers, squeezing supply available for phones. Investing.com Australia
Qualcomm projected fiscal second-quarter revenue between $10.2 billion and $11.0 billion, with non-GAAP diluted EPS expected to fall in the $2.45 to $2.65 range. This non-GAAP figure excludes items like stock-based compensation. The company noted that its forecast factors in the anticipated impact of memory supply shortages affecting demand from several handset customers.
CFO Akash Palkhiwala noted that handset customers are cautious about building plans and managing channel inventory amid shifting memory supply and pricing. “Demand fundamentals are strong, and really, it’s a question of how supply aligns against it,” he said. Investing.com Australia
Qualcomm posted revenue of $12.25 billion for the fiscal first quarter ended Dec. 28, marking a 5% rise year-over-year. Non-GAAP diluted EPS came in at $3.50. “We are pleased to deliver strong quarterly results, with record total company revenues,” Amon said in the earnings release. s204.q4cdn.com
The core chip division, QCT, reported $10.61 billion in revenue, with the licensing segment QTL bringing in $1.59 billion. Inside QCT, handset sales hit $7.82 billion, automotive revenue jumped 15% to $1.10 billion, and IoT climbed 9% to $1.69 billion.
Qualcomm returned $3.6 billion to shareholders this quarter, handing out $949 million in dividends and spending $2.6 billion on buybacks. The company repurchased 15 million shares, according to its earnings release.
For the current quarter, Palkhiwala expects QCT handset revenue to hit around $6 billion, citing the memory supply issue he mentioned earlier. Qualcomm’s overall QCT revenue guidance ranges from $8.8 billion to $9.4 billion.
Qualcomm is pushing beyond just phones, focusing more on autos, PCs, and data centers. The company announced it has closed its acquisition of Alphawave Semi, presenting it as a key move in its data-center strategy.
In the smartphone supply chain, Arm flagged memory shortages as a drag on mobile processor sales, highlighting that the bottleneck extends beyond just one player. A TECHnalysis Research analyst noted Qualcomm—and other device-chip makers—are expected to grapple with the memory squeeze for multiple quarters.
The risk is clear: if memory supply tightens more, phone manufacturers might scale back production once again, putting Qualcomm’s handset recovery at risk. This scenario would also challenge whether gains in automotive and emerging segments can compensate for a prolonged slump in phones.
With the overnight drop setting the stage, traders are turning to the U.S. open for clearer signals on liquidity and positioning. Qualcomm is set to report earnings on May 6, a key date investors will watch closely for clues on whether memory supply and pricing have steadied and if handset orders in China are picking up.
