Key Highlights
- Qualcomm (QCOM) shares declined 7% Monday, reaching a low of $186.71 from the previous close of $201.97.
- CEO Cristiano Amon offloaded approximately $4 million in QCOM shares through two transactions executed under a pre-established 10b5-1 trading plan.
- Negotiations with Samsung regarding 2nm chip production remain deadlocked over pricing disputes, potentially delaying any agreement until 2027.
- The semiconductor sector experienced widespread selling pressure as the 10-year Treasury yield surged past 5.2%.
- Third-quarter revenue exceeded projections at $9.95 billion, though earnings per share of $2.21 fell short of the $2.23 forecast.
Shares of Qualcomm (QCOM) tumbled 7% during Monday’s trading session, hitting an intraday low of $186.71 before closing around $187.48. The decline represented a significant retreat from Friday’s closing price of $201.97.
The selloff came after disclosure that CEO Cristiano Amon executed sales totaling 20,000 QCOM shares through two separate transactions during the previous week. The combined proceeds approached $4 million, with both sales conducted through a predetermined Rule 10b5-1 trading arrangement.
Amon divested 10,000 shares at $200.00 per unit on September 25, followed by another 10,000 shares at $195.00 on September 21. Following these transactions, he maintains direct ownership of 177,568 Qualcomm shares, representing approximately $35.5 million in value.
The executive stock sales coincided with broader weakness throughout the semiconductor industry. Qualcomm joined peers including Arm and Marvell in declining as market participants reduced exposure to chip stocks.
Escalating bond yields compounded the pressure. The 10-year Treasury yield advanced to 5.218% amid rising crude oil prices and market expectations of additional Federal Reserve rate increases, pulling technology and semiconductor stocks lower throughout the session.
Samsung 2nm Manufacturing Discussions Face Obstacles
Qualcomm’s ongoing negotiations with Samsung concerning 2nm chip fabrication continue to face headwinds related to pricing disagreements and yield concerns, according to reports from TrendForce and Digitimes. The company’s previously announced 2nm products are designated for TSMC production, while any potential Samsung partnership may not materialize until 2027.
The extended timeline dampened some of the enthusiasm that had developed in recent trading days. Shares had advanced previously on speculation about diversifying manufacturing partnerships beyond TSMC.
Financial Results and Street Sentiment
Qualcomm’s latest quarterly earnings report, issued on July 29, revealed earnings per share of $2.21, falling short of the $2.23 consensus estimate. Revenue totaled $9.95 billion, surpassing the anticipated $9.69 billion.
Despite the revenue beat, top-line results declined 4% year-over-year. Management provided fourth-quarter EPS guidance ranging from $2.05 to $2.25.
Analyst consensus currently assigns QCOM a “Hold” rating. The average Wall Street price target stands at $204.10, based on MarketBeat data.
Analyst opinions have varied recently. Raymond James initiated coverage with a “strong-buy” recommendation, whereas Barclays maintained an “underweight” stance and JPMorgan elevated its price objective to $265 while keeping a “neutral” rating.
The company distributed a quarterly dividend of $0.92 per share on September 24 to shareholders of record as of September 3. The payout translates to an annualized yield of approximately 2%.
Qualcomm continues expanding into automotive, IoT, artificial intelligence, and robotics sectors to reduce dependence on smartphone chipsets. Automotive segment revenue surged 61% in the most recent reporting period, with the company targeting $40 billion in revenue from non-handset businesses.
The chipmaker also announced plans to acquire robotics-software company Picknik, though financial terms remained undisclosed. The acquisition strengthens its position in automation technology.
Earlier this month, Qualcomm extended its global patent-licensing arrangement with Apple. The renewed agreement becomes effective April 1, 2027, and triggered a 6% stock rally three days prior to Monday’s decline.
QCOM shares have appreciated 10% year-to-date but trade 24% below the 52-week peak of $251.02 reached in May. Institutional investors, including BlackRock and Bank of New York Mellon, established fresh positions during the second quarter, with institutional ownership now comprising approximately 74% of outstanding shares.
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