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Qualcomm stock sinks as memory shortage drags on forecast
Qualcomm reported fiscal first-quarter earnings on Wednesday that beat expectations, but the company's forecast came up short because of the global memory shortage. Shares sank following the release.
In the current quarter, Qualcomm said it expected adjusted earnings per share between $2.45 and $2.65 on revenue between $10.2 billion and $11 billion. Analysts polled by LSEG were expecting $11.11 billion in sales and earnings of $2.89 per share.
Qualcomm executives said in an interview that the shortfall in guidance was directly related to the global memory shortage. Big orders for data center memory are taking production capacity for memory for smartphones and other devices.
The company's smartphone customers, who buy their own memory and pair it with Qualcomm's processors and modems, are closely watching their purchases and inventories and adjusting them based on the availability of memory.
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Cantor Fitzgerald Lowers Qualcomm (QCOM) PT to $160, Cites Conservative Guidanc, Looming Market Share Shifts
Qualcomm Inc. (NASDAQ:QCOM) is one of the most undervalued quality stocks to buy right now. On February 2, Cantor Fitzgerald lowered its price target for Qualcomm to $160 from $185 while keeping a Neutral rating.
Although the firm anticipates that Qualcomm will exceed expectations for the December quarter, it expects the company to issue conservative guidance for the upcoming periods, modestly below consensus for March and significantly below for June. This outlook is attributed to factors like Apple’s reduced modem share, Samsung’s transition to moving some modems in-house, and a decline in the Chinese handset market.
On January 25, Mizuho analyst Vijay Rakesh reduced the price target for Qualcomm Inc. (NASDAQ:QCOM) to $160 from $175 with a Neutral rating following an industry call regarding handsets. Rakesh informed investors that global handset estimates for 2026 are down 4% year-over-year, with further downside expected in H2 of the year due to memory shortages and pricing issues. Consequently, the firm lowered price targets across the sector.
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