"Storage shortage" looming! Qualcomm's stock price plunges over 8%

CNBC reports that Qualcomm released its Q1 FY2026 earnings on February 4th, exceeding market expectations, but due to the global memory shortage, the company’s outlook fell short of expectations.

During pre-market trading on February 5th, Qualcomm’s stock plummeted over 11%. It closed down more than 8%.

For the first quarter of FY2026 ending December 28, 2025, Qualcomm reported revenue of approximately $12.25 billion, up 5% year-over-year, surpassing the analyst average estimate of about $12.18 billion. GAAP net profit was $3.004 billion, down 5.5% year-over-year, while non-GAAP net profit was $3.78 billion, up 3%, slightly exceeding market expectations. Semiconductor business (QCT) revenue was $10.61 billion, and licensing business (QTL) revenue was $1.59 billion, both showing year-over-year growth.

However, for the second quarter of FY2026, Qualcomm provided guidance of revenue between approximately $10.2 billion and $11 billion, below the analyst consensus of over $11.1 billion. Adjusted EPS is expected to be in the range of $2.45 to $2.65, below the market estimate of around $2.89.

Qualcomm pointed out that the global memory chip supply remains tight, with large orders for data center memory squeezing the memory capacity for smartphones and other devices, thereby suppressing demand for its processors. Qualcomm’s mobile customers need to purchase memory independently and use Qualcomm processors and modems. Currently, these customers are closely monitoring procurement and inventory levels and adjusting their stocking strategies based on memory supply conditions.

CEO Cristiano Amon stated that demand for mobile devices remains strong, and the smartphone market is in an upgrade cycle, but Qualcomm expects supply chain issues for smartphones.

He mentioned it’s unclear whether phone manufacturers will raise prices, but expects Qualcomm’s customers to shift focus to high-end models. High-end phones can better absorb the cost increases caused by memory price hikes compared to entry-level phones. Amon said Qualcomm’s competitiveness in the high-end mobile chip market is the strongest.

In this quarter, Qualcomm’s mobile business revenue reached $7.82 billion, up 3% year-over-year.

Qualcomm’s IoT division revenue grew 9% year-over-year to $1.69 billion, covering industrial chips and chips powering Meta’s smart glasses.

Qualcomm’s automotive business revenue surged 15% year-over-year to $1.1 billion, supplying in-car chips to automakers like Toyota. This segment continues to expand.

Qualcomm stated that revenue from its new AI chips and other data center products is expected to be included in financial reports starting from FY2027.

This article is an exclusive report by Observer, unauthorized reproduction is prohibited.