Qualcomm stock drops on a weak forecast as a memory shortage weighs on phones

Qualcomm reported fiscal fourth-quarter 2026 results on November 4, beating estimates with adjusted earnings of $2.17 per share on adjusted revenue of $10.44 billion, though revenue fell 7% year over year. Shares dropped about 7% in extended trading after the company issued a current-quarter forecast of $2.15 to $2.35 in EPS and $10.4 billion to $11.2 billion in revenue, which came in below some analyst expectations.

Handset chip sales fell 26% to $5.14 billion, missing estimates, as higher memory costs faced by phone makers dampened demand even after Qualcomm raised its own prices in September. The company said the category is seeing sequential growth and that Android shipments in China have bottomed out, with the handset market expected to be flat in 2027.

Data center revenue came in at $650 million for the quarter, mostly from customization and connectivity work. CEO Cristiano Amon said the company does not have a demand problem but a supply problem, and Qualcomm reiterated a $5 billion data-center revenue target for fiscal 2027. Automotive revenue grew 89% year over year to $1.99 billion, while licensing revenue fell 7% to $1.3 billion despite renewed agreements with Apple, Huawei, and Transsion.

Why it matters

A memory-cost squeeze on phone makers is dragging down Qualcomm's core handset business even as its data-center and automotive bets grow.

Source: CNBC