Qualcomm’s Financial Results Highlight Challenges from Global Memory Shortage

robust Quarterly Earnings Tempered by Supply Chain Issues

In its latest fiscal quarter, Qualcomm exceeded market expectations with an adjusted earnings per share (EPS) of $3.50, slightly surpassing the predicted $3.41. Revenue also edged higher than forecasts, reaching $12.25 billion compared to the anticipated $12.21 billion.

However, despite these encouraging numbers, Qualcomm’s shares dropped nearly 10% in after-hours trading as investors reacted to a cautious forecast for the next quarter.

Cautious Outlook Driven by Persistent Memory Component Shortages

The company projected adjusted EPS between $2.45 and $2.65, with revenue guidance ranging from $10.2 billion to $11 billion. These figures fell short of analyst consensus estimates of $11.11 billion in sales and EPS of $2.89.

This conservative outlook is primarily attributed to ongoing global shortages in memory chips, which have restricted production capabilities across key markets such as smartphones and data centers.

Memory Constraints Reshape Industry Landscape

“The availability of memory components is becoming a critical bottleneck influencing growth within the mobile sector,” remarked qualcomm CEO Cristiano Amon during a recent technology forum.

Amon noted that while consumer demand for smartphones remains strong amid widespread device upgrades, supply chain limitations caused by memory scarcity are expected to continue affecting product availability well into 2026.

Tilt Toward High-End Smartphones Amid Rising Costs

The CEO highlighted that manufacturers are increasingly prioritizing premium smartphone models capable of absorbing elevated memory costs rather than lower-priced devices facing tighter profit margins or reduced output.

This strategic shift aligns with Qualcomm’s strengths in supplying advanced processors and modems integrated with high-performance memory modules tailored for flagship handsets despite escalating component prices.

Diverse Business Segments Fuel Revenue Growth Beyond Mobile Phones

• Smartphone chipset sales: Climbed 3% year-over-year to approximately $7.82 billion, even amid supply constraints;
• Total revenue: Rose 5%, reflecting resilience across multiple business units;
• internet of Things (IoT): The segment expanded by 9%, generating around $1.69 billion. This includes semiconductor solutions powering emerging consumer gadgets like smart home devices developed alongside leading tech firms;
• Automotive division:: Experienced robust growth at 15%, reaching roughly $1.1 billion , supplying chips for connected car technologies and autonomous driving systems used by major automakers such as Ford and Volkswagen;

Evolving Prospects in AI-Driven Data Center Market

The company expects initial revenue contributions from its AI-optimized data center processors starting fiscal year 2027 as it competes against established players like Nvidia and AMD within this rapidly expanding sector fueled by surging artificial intelligence workloads worldwide.

Earnings Composition reveals Mixed Profitability Trends

• Total net income:: Reported near $3 billion ($2.78 per share), slightly below last year’s comparable period when net income was about $3 .18 billion ($ $ $ $ $ $ $‍‍‍‍‍‍‍‍‌‌‌‌‌‌‌‌‌‌‌‎‎‎‎‎‏‏‏‏‏‫‫‫‫‬‬‬‬⁤⁤⁤⁤⁢⁣⁣⁣⁣⁣⁣⁠⁠⁠⁠⁠⁠⁠⁠‪‪‪‪‪‪‭‭‭‭‭‮‮‮‮‮​​​​​​​​​​​​​​​​​​​​​​​​​​​​​         $$     $$   $$   $$   $$     ($₂₈₃ per diluted share);