TLDRs:
- Qualcomm shares jump after hours despite memory shortages impacting smartphones.
- AI and automotive chip expansion provide buffer against handset supply challenges.
- Memory constraints may continue, pressuring quarterly revenue guidance in 2026.
- Investors await Mobile World Congress for clues on premium smartphone trends.
Qualcomm Incorporated (NASDAQ: QCOM) experienced notable volatility in after-hours trading Wednesday after signaling that near-term handset shipments are constrained by a global memory shortage.
Shares initially spiked to $134 before settling at $148.89, reflecting investor caution amid a mixed earnings picture. The semiconductor giant reported record quarterly revenue of $12.252 billion and non-GAAP earnings per share (EPS) of $3.50, excluding stock-based compensation. For fiscal second quarter, Qualcomm projected revenue between $10.2 billion and $11.0 billion and non-GAAP EPS of $2.45 to $2.65.
While the top-line numbers highlight continued strength, the softer guidance underscores the impact of limited memory supply on handset clients, particularly Chinese OEMs reducing inventory levels.
Diversification Into AI and Automotive Chips
Chief Executive Cristiano Amon emphasized that memory shortages, rather than demand issues, primarily affected Qualcomm’s forecast.
“I’m very happy with the business, I just wish we had more memory,” Amon noted.
Analysts, including Bob O’Donnell from TECHnalysis Research, warn that the global memory crunch may persist for several quarters, creating near-term challenges for smartphone chip shipments, projected to fall by 7% in 2026 by Counterpoint Research.
To mitigate these pressures, Qualcomm is actively expanding beyond smartphones. The company’s push into automotive chips, PCs, and AI-focused data-center solutions aims to smooth revenue fluctuations. AI data-center chips are slated for release in the second half of 2026, with meaningful contributions expected in fiscal 2027. These strategic moves provide investors some reassurance that growth will not solely depend on handset volumes.
Short-Term Risks Remain Clear
Memory scarcity continues to act as a bottleneck in Qualcomm’s supply chain. When memory chips become scarce or expensive, handset makers have limited workarounds, often resulting in reduced shipments or altered product mixes. This, in turn, directly impacts chip orders and creates quarter-to-quarter revenue swings.
While premium smartphone sales generally hold up better than mid-range models, the industry-wide shortage increases costs and slows upgrade cycles. Another emerging risk is the gradual in-house development of silicon by customers, which could erode Qualcomm’s market share over time, though such shifts are typically gradual until they accelerate suddenly.
Investors Focus on Upcoming Milestones
Traders will be watching Thursday’s regular session to see whether after-hours momentum continues and how liquidity affects stock performance. Longer-term, the upcoming Mobile World Congress in Barcelona from March 2-5 is a critical event. Premium smartphone launches during the conference will offer insights into component demand, device innovation, and how OEMs plan to manage memory constraints.
As Qualcomm balances immediate supply-chain risks with long-term growth initiatives in AI and automotive sectors, the stock’s trajectory reflects both caution and optimism. Investors are pushing for clarity on when handset demand may stabilize and whether Qualcomm’s data-center initiatives translate into booked revenue, providing a buffer against handset-related volatility.
Conclusion
Qualcomm’s QCOM stock performance this week highlights the dual nature of the semiconductor industry, short-term volatility from memory shortages versus long-term growth from diversification into AI and automotive markets. While handset constraints remain a near-term hurdle, the company’s strategic expansion provides a safety net, suggesting that 2026 could still be a strong year for the chipmaker.
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