After a notable performance during regular trading hours, Qualcomm has experienced a sharp decline in its stock price following the release of its Q1 2026 earnings report. Despite surpassing analysts’ expectations with its recent financial results, the company’s cautious outlook proved to be a letdown for investors.
As of 5:22 p.m., Qualcomm’s stock, which closed at $148.89 during the day, is down approximately 11.7% in after-hours trading. This drop marks a significant shift for the tech giant, which had seen its shares climb slightly during the day’s market activity.
In its earnings presentation, Qualcomm highlighted challenges in the data center operations space, attributing difficulties to the increasing demand for memory solutions fueled by the rapid growth of artificial intelligence. The company indicated that there is “near-term uncertainty in memory supply and pricing for handset original equipment manufacturers (OEMs).” It also mentioned that some OEMs, particularly in China, have started to adjust their handset production plans and inventory levels in response to these challenges.
Looking ahead, Qualcomm has adopted a more conservative forecast for the second quarter of 2026, projecting revenues between $10.2 billion and $11 billion, alongside adjusted earnings per share (EPS) in the range of $2.45 to $2.65. This guidance is notably below the consensus estimate of $11.02 billion in revenue and adjusted EPS of $2.87 from analysts.
In the reported first quarter of 2026, Qualcomm achieved a record revenue of $12.3 billion and adjusted diluted EPS of $3.50, marking a 3% increase compared to the previous year. However, the subdued second-quarter forecast has raised concerns among investors about the company’s growth trajectory moving forward.
Despite the current decline, some analysts suggest that the stock’s downturn may represent a buying opportunity for long-term investors. They argue that the memory shortage is unlikely to persist indefinitely and that Qualcomm’s overall growth potential remains intact. The management reassured stakeholders that the firm is on track to meet its ambitious fiscal 2029 targets, which include achieving $8 billion in automotive business revenue and $14 billion in Internet of Things revenue, up from $2.4 billion and $5.4 billion, respectively, in fiscal 2024.
As investors weigh their options, the future direction of Qualcomm remains a topic of keen interest amid these market fluctuations.
