Qualcomm stock falls 9% as smartphone chip sales drop 26%

What happened. On November 4, after the US market closed, Qualcomm reported results for its fiscal fourth quarter, which ended September 27. Revenue was $10.32 billion, down 8% from a year earlier. Adjusted earnings were $2.17 a share, against $3.00 a year ago. Analysts had expected $2.16 a share and $10.12 billion in revenue, so the quarter itself beat forecasts.

The market reaction. On Thursday, November 5, the stock closed at $156.75, down 9.49%. Reuters says that in early trading the drop was more than 9%, which could have wiped out more than $17 billion in market value.

The weak spot. Smartphone chips are Qualcomm's largest business. Their revenue fell 26% to $5.14 billion. Analysts had hoped for $5.3 billion. Car chips grew 89% to $1.99 billion, the first quarter above $2 billion for that business. IoT, which means chips for connected devices, grew 4% to $1.89 billion.

The outlook. For the first quarter of fiscal 2027 Qualcomm expects revenue of $10.4 billion to $11.2 billion and adjusted earnings of $2.15 to $2.35 a share. Yahoo Finance says the revenue midpoint is above what analysts expected, but the earnings midpoint of $2.25 is below their $2.32. Yahoo Finance ties the drop to that gap, while Reuters points mainly to the smartphone miss.

Costs and memory. Qualcomm says costs are rising across the chip industry, from wafer making to memory. It is raising its prices and expects the full benefit for chip gross margins only in the second half of fiscal 2027. Reuters and Yahoo Finance both tie the squeeze to a memory shortage: AI data centers soak up supply, memory gets pricier, phones get pricier, and demand cools.

The bet. CEO Cristiano Amon says revenue outside smartphones should grow more than 60% in fiscal 2027, and he repeats the $5 billion data-center revenue target for that year. Reuters reports that brokerages see better long-term visibility but not yet better near-term earnings, and at least 10 of them cut their price targets. In our view, that is why the stock fell even with a record car quarter.

What is missing. There is no answer on when smartphone chip sales stop falling, or how fast data-center revenue will start. It is also unclear how much of the price increases will hold while demand is weak.

Fatos confirmados

• In the fiscal fourth quarter of 2026 (to September 27) Qualcomm's revenue was $10.32 billion, down 8% from a year earlier; adjusted earnings were $2.17 a share against $3.00.^[1][3]
• Analysts had expected revenue of $10.12 billion and earnings of $2.16 a share.^[3]
• Smartphone chip revenue fell 26% to $5.14 billion.^[1][2][3]
• Car chip revenue rose 89% to $1.99 billion, the first quarter above $2 billion.^[1]
• Guidance for the first quarter of fiscal 2027: revenue of $10.4 billion to $11.2 billion, adjusted earnings of $2.15 to $2.35 a share.^[1]
• Yahoo Finance says the earnings midpoint ($2.25) is below analysts' expectation ($2.32), while the revenue midpoint is above their $10.6 billion.^[3]
• On November 5 Qualcomm shares closed at $156.75, down 9.49%.^[3]
• Reuters says shares fell more than 9% in early trading on November 5, which would mean a loss of more than $17 billion in market value if it held.^[2]
• CEO Cristiano Amon: revenue outside smartphones should grow more than 60% in fiscal 2027; the $5 billion data-center revenue target is reiterated.^[1]
• Qualcomm cites rising costs across the industry and higher prices of its own; it expects the full benefit for chip gross margins in the second half of fiscal 2027.^[1]
• Reuters ties the pressure to higher memory costs driven by data-center demand and slowing smartphone sales; at least 10 brokerages cut price targets (LSEG data).^[2]

Implicações

• ConfirmadoSmartphone chips remain Qualcomm's largest business, and their fall still outweighs growth in cars and IoT.
• Nossa leituraThe market seems to be pricing the gap between promised data-center growth and weak near-term earnings. This is our view.
• Nossa leituraWhile costly memory weighs on demand, new phones are unlikely to get cheaper. This is our view.

Ainda não se sabe

• When smartphone chip sales stop falling
• How fast data-center revenue will start
• How much of the price increases will hold while demand is weak

Quem é afetado

United States, World. People who follow the smartphone and chip market, and buyers of new phones

Fontes

1. Qualcomm (investor relations): Qualcomm Announces Fourth Quarter and Fiscal 2026 Results 4 de novembro de 2026 · oficial
2. Reuters: Qualcomm shares slump as weak smartphone chip sales overshadow data-center momentum 5 de novembro de 2026 · mídia
3. Yahoo Finance: Qualcomm tops Q4 estimates, but Q1 earnings outlook falls short, sending stock lower 5 de novembro de 2026 · mídia