Qualcomm beat Wall Street's estimates for its fiscal fourth quarter on Wednesday, but its shares still slid about 7% in after-hours trading as investors focused on a forecast crimped by a shortage of memory chips rather than the headline numbers.
Adjusted earnings came in at $2.17 a share on revenue of $10.44 billion, both ahead of consensus, according to Qualcomm's fourth-quarter earnings report. Handset chip sales still fell 26% year over year to $5.14 billion, as rising memory prices pushed phone makers — including Qualcomm's own customers — to raise device prices, denting demand. The company's full fiscal 2026 results showed revenue down 3% to $43.1 billion, with non-GAAP earnings per share falling 12% to $10.54.
The weaker spot came in guidance: Qualcomm projected fiscal first-quarter adjusted earnings of $2.15 to $2.35 a share on revenue of $10.4 billion to $11.2 billion, below the roughly $2.27 and $10.48 billion analysts had modeled. Chief executive Cristiano Amon told analysts the shortfall traces to supply, not demand. "We don't have a demand issue; it's a supply issue," he said, adding that data-center chip sales — now $650 million a quarter — would be higher "if I had more supply."
Not every segment struggled. Automotive revenue jumped 89% to $1.99 billion, well above estimates, and the company unveiled a new deal the same day to supply technology for SpaceX's cellular buildout. Licensing revenue held roughly flat at $1.3 billion after Qualcomm renewed patent agreements with Apple, Huawei and Transsion.
Data centers remain the story investors are watching most closely. Qualcomm reiterated a target of $5 billion in data-center revenue for fiscal 2027 and said non-handset revenue — automotive, IoT and data centers combined — should grow more than 60% next year, a shift the company has called the start of its "non-handset inflection." Qualcomm has also struck multi-year AI-chip supply arrangements with Amazon, Microsoft and Meta this year as it tries to diversify away from its reliance on smartphone royalties and chip sales.
For now, the memory squeeze is the near-term drag: Qualcomm said handset chip sales are growing again sequentially and that Android shipments in China have bottomed out, but it still expects the overall handset market to be flat through 2027 — leaving the data-center ramp to carry most of next year's growth story.
