Qualcomm shares slide over 4% after weak handset revenue and memory cost concerns
Qualcomm's Q4 results missed handset revenue expectations, with memory price pressure and Apple modem shifts driving a 4%+ stock drop and prompting cautious outlooks.
Based on reporting by David Moadel (24/7 Wall St.), Thomas Richmond (24/7 Wall St.) and Economic Times (The Economic Times).
What Qualcomm reported
Qualcomm (NASDAQ:QCOM) posted fourth‑quarter results that missed Wall Street’s expectations for its smartphone chip business, sending the shares down more than 4% in extended trading on November 4. Handset‑related revenue fell 26% to $5.14 billion, pulling the overall chip segment revenue down 8% to $9.02 billion. Adjusted sales slipped 7% to $10.44 billion, just above the $10.11 billion consensus, while adjusted earnings came in at $2.17 per share versus the $2.16 estimate.
Analysts had been looking for earnings per share of $2.16, a 28.1% year‑over‑year decline, and the company delivered $2.17, narrowly beating that number. However, the miss in handset revenue and the broader memory‑price squeeze outweighed the small EPS beat.
Why the stock fell
The decline reflects three intertwined pressures:
Memory‑price shock. Rising costs for high‑bandwidth memory used in AI servers have pushed up component prices for smartphones, squeezing Qualcomm’s margins.
Apple modem transition. Investors remain wary of Apple’s move to its own modem chips, which could further erode Qualcomm’s handset business.
Mixed diversification. While automotive revenue jumped 89% to a record $1.99 billion, the growth in non‑handset segments has not yet offset the handset slowdown.
Before the earnings release, the stock had slipped 8.82% over the past week and was trading around $164.82, after briefly climbing 3.57% to $170.31 earlier in the day.
What it means for investors and consumers
For investors, the results underline the risk that memory‑price volatility poses to companies that rely heavily on smartphone chips. Even a modest beat on earnings per share can be eclipsed by a sharp revenue decline in the core handset segment, which still accounts for the bulk of Qualcomm’s cash flow.
Consumers may feel the impact indirectly. Higher memory costs can translate into pricier smartphones, especially premium models that use the latest AI‑enabled processors. The ongoing Apple‑modem shift could also mean fewer Qualcomm‑powered iPhones in the future, potentially limiting competition in the modem market.
What to watch next
Analysts will focus on the company’s guidance for the first quarter of fiscal 2027. Qualcomm expects revenue between $10.4 billion and $11.2 billion, with the midpoint above the $10.48 billion average estimate. Chip‑segment sales are projected between $9 billion and $9.6 billion, beating the $8.88 billion consensus, and adjusted profit is forecast at $2.15‑$2.35 per share versus the $2.27 estimate.
Key upcoming catalysts include:
Details on the two custom silicon deals with hyperscalers that are slated to start generating revenue in December.
Progress on the multi‑year 5G contract with SpaceX’s Starlink Mobile network, set to begin in 2027.
Further clarification on Apple’s modem roadmap and whether Qualcomm can replace that revenue with non‑handset growth, such as the $40 billion data‑center target for fiscal 2029.
Investors should also keep an eye on broader memory‑price trends, as they remain a key driver of Qualcomm’s profitability. For a deeper look at why stock prices move, see our guide on the biggest drivers of stock price movements.
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