Qualcomm shares drop following weak earnings forecast
Qualcomm shares declined in extended trading as the company issued a soft outlook, citing supply chain constraints and elevated memory costs impacting smartphone sales.
Qualcomm reported quarterly earnings that exceeded analyst estimates but faced market pressure after providing a conservative revenue forecast for the coming quarter. While the chipmaker posted adjusted earnings per share of $2.17 against the expected $2.16, investor sentiment cooled due to ongoing challenges in the mobile market.
Sales of smartphone-related chips dropped 26% to $5.14 billion as rising memory costs constrained consumer demand. CEO Cristiano Amon attributed the production lag to supply chain limitations rather than a lack of interest, noting that the company is struggling to meet demand in the data center sector. Qualcomm is actively pivoting toward AI infrastructure, targeting $5 billion in data center revenue by fiscal 2027.
The automotive division provided a significant boost, with revenue growing 89% year-over-year to $1.99 billion. Additionally, the company maintained its intellectual property licensing scale through contract renewals with Apple, Huawei, and Transsion.