Qualcomm's smartphone chip sales miss estimates, shares fall

A man walks past Qualcomm 6G placard at the Mobile World Congress (MWC) at Fira de Barcelona, Spain, March 2, 2026. REUTERS/Albert Gea

Nov 4 : Qualcomm on Wednesday fell short of Wall Street estimates for fourth-quarter revenue from its smartphone chips on sluggish demand and declining Apple-related revenue, sending its shares down more than 4 per cent in extended trading.

Demand for lucrative high-bandwidth storage for AI servers has pushed up memory chip prices, raising the cost of consumer electronics and squeezing smartphone processor designers such as Qualcomm.

Global smartphone shipments fell 20 per cent in the September quarter to a 14-year low, according to Counterpoint Research.

Revenue from Qualcomm's handset unit, which makes chips for smartphones, fell 26 per cent to $5.14 billion in the fourth quarter, dragging the chip segment's revenue down 8 per cent to $9.02 billion.

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Analysts polled by Visible Alpha expected handset revenue of $5.25 billion.

In an interview with Reuters, Qualcomm CEO Cristiano Amon said sales of Android handsets are ticking upward again.

"Unlike some other companies, we called this memory thing early, and we said we prepared for it," Amon said. "We're starting to see sequential growth now on Android, we have been really executing on the non-handset business."

Investors had also worried over Apple switching to using its own modem chips and Qualcomm's warning of a faster-than-expected decline in sales to the iPhone maker.

Amon said the first-quarter fiscal 2027 forecast given on Wednesday includes no further sales from Apple, while Qualcomm has been winning business with other customers beyond the smartphone business.

"We have within the year a 70 per cent increase year-over-year in the design wins in fiscal "27, with Apple out of the model," Amon said. "We expect the non-handset (revenue) to replace Apple entirely, and you're going to see 60 per cent year-over-year growth in the non-handset business as you go to fiscal '27."

The smartphone chipmaker expects first-quarter revenue between $10.4 billion and $11.2 billion, the midpoint of which is above analysts' average estimate of $10.48 billion, according to data compiled by LSEG.

It expects sales in its chip segment to be between $9 billion and $9.6 billion, exceeding estimates of $8.88 billion.

Adjusted profit is expected to be between $2.15 and $2.35 per share, compared with estimates of $2.27.

A September agreement allowing Amazon to buy up to $60 billion of Qualcomm's AI chips and related data-center products added the e-commerce giant to a client roster that includes Microsoft and Meta Platforms.

Qualcomm has said revenue from two custom chip programs with hyperscalers would begin in the current quarter ahead of a ramp-up of its AI accelerator products next year as it targets $15 billion in annual data-center revenue by fiscal 2029.

Earlier on Wednesday, the company signed a multi-year 5G deal to supply radio equipment, baseband units and software for SpaceX's planned nationwide Starlink Mobile network starting in 2027.

Adjusted sales in the fourth quarter fell 7 per cent to $10.44 billion, beating estimates of $10.11 billion. Adjusted profit came in at $2.17 per share, compared with estimates of $2.16.

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