Qualcomm reported fiscal Q1 2026 earnings that beat expectations, but its outlook for the next quarter fell short, dragging shares down 11% in after-hours trading. The chipmaker posted adjusted EPS of $3.50 and revenue of $12.25 billion, narrowly exceeding analyst predictions.
However, the company's forecast for Q2 revenue ranged between $10.2 billion and $11 billion, below the $11.11 billion Wall Street had anticipated. The adjusted EPS guidance of $2.45 to $2.65 also lagged behind the $2.89 consensus. Qualcomm CEO Cristiano Amon attributed the disappointing outlook to the soaring demand for memory chips in AI data centers, which is diverting supply away from smartphones.
AI Data Centers Reshape Memory Chip Market
The rapid expansion of AI infrastructure is consuming vast quantities of memory chips, leaving fewer available for smartphone manufacturers. This shift has hit smaller Chinese OEMs hardest, as they lack the buying power of industry giants like Apple or Samsung. Their production cuts and inventory reductions mean fewer Qualcomm chips are shipped to these brands.
In response to rising memory costs, Qualcomm revealed plans for double-digit price increases starting September 1, 2026. This may further strain smartphone makers already squeezed by supply shortages.
Though Qualcomm is diversifying into automotive, IoT, and PC markets, the handset segment remains its core revenue source. The ongoing chip scarcity poses a significant challenge, likely extending through much of fiscal 2026.
This article is for informational purposes and does not constitute financial advice.
