Qualcomm announced earlierFiscal Year 2026 First Quarter Financial ReportAlthough the company benefited from demand for automotive and high-end mobile phones, achieving a record high quarterly revenue of US$123 billion, its outlook for the next quarter was conservative due to the "global memory shortage" factor, resulting in financial forecasts that fell short of Wall Street expectations and causing its stock price to plummet by 9% in after-hours trading.
Automotive sales and total revenue hit record highs, but underlying concerns emerge.
According to Qualcomm's financial report, its performance in the first quarter of fiscal year 2026 was actually quite impressive:
• Total Revenue:It reached a record $123 billion.
• QCT chip business:Qualcomm's automotive electronics revenue has surpassed $10 billion for two consecutive quarters, demonstrating the continued positive impact of its strategic investments in automotive digital cockpits and autonomous driving.
In addition, Qualcomm announced the completion of its acquisition of Alphawave Semi, which will help accelerate its expansion into the data center field.
With memory becoming more expensive and scarcer, mobile phone manufacturers are hesitant to order more.
However, market panic stemmed from Qualcomm's pessimistic forecast for the second quarter. Qualcomm estimated second-quarter revenue to be between $102 billion and $110 billion, lower than the average analyst expectation of $111.2 billion; adjusted earnings per share were estimated at $2.45 to $2.65, also lower than the market expectation of $2.89, thus impacting Qualcomm's subsequent stock price performance.
Qualcomm CEO Cristiano Amon, in an interviewReuters NewsDuring the interview, it was pointed out that the only reason for failing to meet financial forecasts was a "shortage of memory chips." Cristiano Amon stated, "I am very satisfied with the company's business—I just wish we had more memory." Due to the current tight supply and soaring prices of memory components, mobile phone brands, especially Chinese manufacturers, have had to reduce inventory levels to cope with cost pressures, which in turn has affected their ability to order Qualcomm processors.
Bob O'Donnell, chief analyst at TECHnalysis Research, also pointed out that, like other chip manufacturers, Qualcomm will be impacted by the global memory shortage in the coming quarters, which will have a certain impact on its short-term prospects.
High-end smartphones remain a safe haven
Despite the headwinds in the market, Cristiano Amon emphasizes that consumer demand for premium and high-tier smartphones remains strong. He analyzes that due to rising memory costs, mobile phone manufacturers tend to allocate limited memory resources to the most profitable flagship models. Qualcomm chips are primarily used in these high-priced Android devices, thus having a better chance of weathering the impact of memory price increases compared to the mid-to-low-end market.
Analysis of viewpoints
This wave of "memory chaos" has actually been brewing for some time. With the increasing demand for memory capacity from AI phones and AI PCs (for example, to run on-device AI models, memory capacity often needs to start at 8-12GB), coupled with the fact that HBM (High Bandwidth Memory) production capacity is squeezing out the production of standard DRAM, a serious supply-demand imbalance has occurred in the supply chain.
Qualcomm's financial forecast warning reflects the challenges the entire mobile phone industry will face in the first half of 2026: "Having processors but no memory, or memory being too expensive to buy."
However, the fact that Qualcomm's automotive revenue has exceeded $10 billion for several consecutive years, and the recent acquisition of Alphawave Semi, highlights that Qualcomm is striving to reduce its reliance on the mobile phone business and move towards diversification as a safer growth strategy.
While mobile phone chips will remain the main source of revenue in the short term and will be affected by inventory adjustments, in the long run, automotive and data center businesses will become the next pillar supporting Qualcomm's stock price.
