Qualcomm Sinks Up to 14% for Worst Day Since 2020 After Handset Revenue Falls 26% and Profit Guidance Misses

Qualcomm fell as much as 14% at Thursday's open, its steepest single-day decline since 2020, after the chipmaker's fiscal fourth-quarter earnings report revealed a sharp drop in smartphone chip revenue and issued first-quarter profit guidance below Wall Street expectations. The company posted Q4 non-GAAP revenue of $10.44 billion, landing at the high end of its guidance range, and earnings of $2.17 per share, but that figure missed the consensus estimate of $2.36 per share. Handset revenue dropped 26% year over year, and a disclosure that Qualcomm's share of Apple iPhone chip supply would be significantly lower than previously anticipated added to investor concern.

For the fiscal first quarter, Qualcomm guided revenue of $10.4 billion to $11.2 billion with earnings of $2.15 to $2.35 per share, a midpoint that fell short of consensus. Analysts flagged soft chip-design margins as a central worry, with memory pricing pressure from expensive DRAM squeezing profitability across both handset and data center businesses. Susquehanna cut its price target on margin pressure and Baird trimmed its target to $320.

Brighter spots in the report included record automotive revenue at an $8 billion annualized run rate and a data center business that is ramping, though analysts noted the new revenue streams carry lower margins than the core handset franchise and are dilutive to overall profitability. Qualcomm said non-handset revenue is on track to represent 50% of total chip sales in the current fiscal year. SpaceX separately selected Qualcomm to supply base-station chips and software for tens of thousands of planned Starlink Mobile sites, though analysts still rate the stock a hold given near-term headwinds. A report that Huawei unveiled a desktop computer built entirely with Chinese-made components, with no Qualcomm or Intel parts, underscored the longer-term risk to Qualcomm's China market position.

The selloff dragged the broader chip sector lower, with Arm Holdings falling roughly 7% and Micron, SanDisk, and AMD also declining. The move came on top of post-midterm election pressure on semiconductor stocks tied to fears of a data center spending slowdown, reinforcing a rotation away from high-beta chip names toward consumer staples, financials, and healthcare.