Qualcomm shares fell Thursday as investors reacted to warnings that industry-wide memory supply constraints are hurting the company’s near-term handset outlook, overshadowing record quarterly revenue and a confident long-term strategy.
Shares of the chipmaker closed 8.5 percent lower, a sharper fall than the 1.6 percent retreat of the Nasdaq composite index.
Qualcomm reported results for its fiscal first quarter ended December 28, 2025, delivering the highest total company revenue in its history. Chief Executive Cristiano Amon said momentum continues to build across personal, industrial and physical AI, backed by customer traction and new products unveiled at CES. That message, however, struggled to offset concerns tied to smartphones, still a core earnings driver.
Management said memory shortages and higher pricing are weighing on demand from several handset customers. While Qualcomm noted healthy end-consumer demand for premium and high-tier smartphones, investors appeared wary that supply constraints could persist into coming quarters and limit shipment volumes.
Despite the caution on handsets, Qualcomm leaned heavily into shareholder returns. The company returned USD3.6 billion during the quarter, including USD949 million in cash dividends and USD2.6 billion spent on repurchasing 15 million shares. The move signals confidence in cash flow and balance sheet strength even amid cyclical pressures.
For the second quarter of fiscal 2026, Qualcomm forecast revenue of USD10.2 billion to USD11.0 billion. The QCT chip segment is expected to generate USD 8.8billion to USD9.4 billion, while licensing revenue from QTL is projected at USD1.2 billion to USD1.4 billion. Non-GAAP diluted earnings per share are guided to USD2.45 to USD2.65, after excluding share-based compensation and acquisition-related items.
The outlook includes the recently closed acquisition of Alphawave IP Group plc, bolstering Qualcomm’s data center ambitions and broadening its AI exposure beyond mobile.
Qualcomm is executing well and investing for the future, but until memory supply tightens ease, handset-related uncertainty is likely to keep investors cautious.
