Memory Supply Constraints.
This is not exclusive to Qualcomm, memory shortage is a large bottle neck, just look at Sandisk earnings.
Management explicitly blamed industry-wide memory shortages tied to AI data centers, which are now:
This is a new macro overhang for QCOM’s core handset business and directly undercuts last quarter’s confidence tone.
Qualcomm’s Q2 FY26 guidance is what broke the stock:
| Metric | Q2 FY26 Guidance |
|---|---|
| Revenue | $10.2B – $11.0B |
| Non-GAAP EPS | $2.45 – $2.65 |
| QCT Revenue | $8.8B – $9.4B |
| QCT EBT Margin | 26% – 28% (down from 31%) |
That EPS guide implies a 25% sequential decline from Q1’s $3.50, far worse than investors were modeling.
Immediately after releasing earnings, Qualcomm stock is down 5.29%.
At the headline level, Qualcomm did what it was supposed to do:
This was not a miss quarter. The stock is down because the forward outlook reset expectations sharply lower.
Live coverage has ended. The full story is below.
Qualcomm (NASDAQ: QCOM | QCOM Price Prediction) reports first-quarter fiscal 2026 results today after the market close at 4:00 PM ET. After shares dropped 14.7% over the past four weeks to $151.53, investors are watching whether the chipmaker can sustain momentum despite mounting headwinds in its core handset business.
Cantor Fitzgerald cut its price target to $160 from $185 on February 4, citing conservative guidance driven by Apple’s reduced modem share, Samsung’s internal modem transition, and a declining Chinese handset market. Mizuho followed with a $160 target, projecting a 4% year-over-year decrease in global handset estimates for 2026.
Handsets remain Qualcomm’s largest revenue driver. Last quarter, the company reported QCT segment revenue of $9.82 billion, the bulk from smartphone chips. Management highlighted 18% growth in non-Apple QCT revenues during the fiscal fourth quarter, but that diversification faces headwinds as major customers shift strategies.
| Metric | Q1 FY2026 Estimate |
|---|---|
| Non-GAAP EPS | $3.39 |
| Revenue | $12.21 billion |
Qualcomm has beaten earnings estimates for eight consecutive quarters, with surprises ranging from 1% to 14%. Prediction markets price an 88% probability the company beats the $3.39 EPS consensus, reflecting confidence despite recent downgrades.
I’ll focus on three areas. First, management’s tone on handset demand through the March quarter and beyond. The company guided first-quarter revenue between $11.8 billion and $12.6 billion in November. Whether they maintain or adjust that range will signal how quickly headwinds are materializing.
Second, automotive and IoT growth rates matter more now. Last quarter, Automotive revenue hit $1.05 billion, up 17% year-over-year, while IoT grew 7% to $1.81 billion. Combined, these segments delivered 27% growth for full fiscal 2025. Sustaining that momentum would offset handset weakness.
Third, I’m watching for commentary on the Ventana Micro Systems acquisition and how it strengthens Qualcomm’s custom CPU roadmap after key Nuvia founder exits.
After delivering $44.28 billion in fiscal 2025 revenue and returning $3.4 billion to shareholders through dividends and buybacks, Qualcomm’s financial foundation remains solid. But with shares trading down 12% year-to-date and well below the analyst average price target of $187.69, this quarter needs to prove the diversification strategy can offset smartphone market pressure. Management’s guidance and tone will matter more than the headline numbers.
Contact [email protected] for any questions or corrections.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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