Qualcomm Issues Weak Forecast Amid Smartphone Sales Drop
· Technology · CNBC, Bloomberg, Reuters
Qualcomm reported better-than-expected quarterly results but issued a disappointing earnings forecast, causing its stock to slide. The chipmaker's overall revenue fell 8% year-on-year, primarily due to a 26% drop in handset chip sales to $5.14 billion, impacted by rising memory costs and subsequent price increases by smartphone manufacturers. CEO Cristiano Amon stated the issue is one of supply, not demand, especially in the data center business. Qualcomm is shifting focus to other chip markets, including AI data center infrastructure, where it expects $5 billion in revenue in fiscal 2027, and its automotive division, which saw an 89% revenue increase to $1.99 billion.
Why it matters
Qualcomm's weak forecast signals ongoing challenges in the smartphone market due to supply chain issues and rising costs, potentially affecting global smartphone production and pricing, while highlighting the company's strategic pivot towards AI and automotive chips for future growth.
Read the original report — CNBC
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