Qualcomm Stock Dips on Weak Smartphone Chip Outlook

Qualcomm Inc. witnessed a substantial stock decline of more than 9% in extended trading on February 5, 2026, after issuing a quarterly sales forecast that disappointed Wall Street. The company projects current quarter sales to range from $10.2 billion to $11 billion, with an expected Earnings Per Share (EPS) of $2.55, falling below the analyst consensus of $11.2 billion in sales and $2.89 EPS.

These challenges stem partly from reduced handset production plans by some of Qualcomm's key customers, notably in China. These clients are facing difficulties in procuring sufficient memory chips, coupled with escalating prices. While CEO Cristiano Amon noted strong consumer demand for premium smartphones, industry-wide supply constraints are a significant headwind. The company also missed expectations in the prior quarter, reporting an EPS of $2.78 against projections of $3.41, though sales were slightly above estimates at $12.3 billion.

Despite the current pressures in its primary smartphone market, Qualcomm is actively pursuing diversification. Revenue from its Phone business was $7.82 billion, while Internet-connected devices and autos contributed $1.69 billion and $1.1 billion, respectively. The company is also set to enter the AI data center components market, aiming to compete with Nvidia, with initial shipments scheduled for next year. However, these newer business avenues have yet to generate enough revenue to fully offset the performance in its core smartphone processor sector.