Qualcomm (QCOM) stock was down 9.6% in after-hours trading on Wednesday after the chipmaker reported quarterly results that topped Wall Street estimates. While the company delivered solid performance, investors focused on its weaker outlook and concerns around smartphone demand.
Claim 50% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
For context, Qualcomm reported earnings of $3.50 per share, beating estimates of $3.40. Revenue came in at $12.25 billion, also slightly above expectations. Still, the stock declined as markets reacted to softer guidance for the current quarter.
Outlook and Handset Concerns Weigh on Sentiment
Qualcomm said its cautious forecast reflects supply issues tied to memory chip shortages. Strong demand for AI-related data center chips is limiting memory supply for smartphones and other devices.
The company also said several smartphone makers, especially in China, are cutting production plans and lowering inventory levels. Since handset makers buy memory separately and combine it with Qualcomm’s processors and modems, these supply constraints can slow device shipments and reduce chip demand.
For the current quarter, Qualcomm expects earnings between $2.45 and $2.65 per share and revenue of $10.2 billion to $11 billion. Both forecasts came in below Wall Street expectations, which weighed on investor sentiment.
The cautious outlook suggests that supply chain challenges and softer handset demand could persist in the near term.
What Investors Are Watching Next for Qualcomm
Investors will watch whether smartphone demand improves and whether memory supply pressures ease. A recovery in handset production could help support Qualcomm’s chip sales.
Markets are also tracking growth in the company’s automotive and IoT businesses, which Qualcomm sees as key long-term growth drivers. For now, investors appear focused on when supply challenges and handset demand will begin to stabilize.
Is QCOM Stock a Buy?
Qualcomm’s stock has a consensus Moderate Buy rating among 16 Wall Street analysts. That rating is based on nine Buy, six Hold, and one Sell recommendations issued in the last three months. The average QCOM price target of $184.67 implies 24.03% upside from current levels.