Qualcomm (NASDAQ:QCOM) posted December-quarter revenue that slightly exceeded estimates, yet the company gave March-quarter guidance that disappointed the market as higher memory prices have constrained handset production.
The chipmaker set March-quarter revenue guidance at $10.6 billion, a sequential decline of 13% and a year-over-year decrease of 2%. That guidance sits about 5% below Wall Street consensus, which was $11.1 billion. Qualcomm also provided EPS guidance of $2.55 for the March quarter, which is $0.35 beneath analyst expectations.
Research firm Wolfe Research kept a Peerperform rating on Qualcomm and highlighted a discrepancy between management’s outlook and comments made at CES, when company representatives had signaled minimal impact to the premium tier that makes up the bulk of QCT revenue. Wolfe Research further suggested that the guidance may incorporate lost share at Samsung’s flagship devices.
Automotive was cited as a regional bright spot in the March-quarter outlook. Qualcomm’s guidance assumes automotive revenue will grow by more than 35% year over year, which implies sequential growth in excess of 20% for that segment. Despite this strength, Wolfe Research warned that memory-related production pressures are unlikely to be resolved within the calendar year.
The research firm also pointed to additional headwinds that could affect Qualcomm later in the fiscal year, including potential impacts to its licensing business and the expected loss of Apple-related revenue starting in the September quarter, with a larger effect anticipated in fiscal 2027.
Separately, Qualcomm reported strong results for the first quarter of fiscal 2026. The company posted earnings per share of $3.50, topping analysts’ forecasts of $3.40. Revenue came in at $12.25 billion, ahead of the $12.11 billion estimate. These results represent a solid start to the fiscal year and were characterized in the company’s reporting as an operational beat.
The fiscal first-quarter outperformance was presented as evidence of robust growth in the early part of the fiscal year. The results were noted as reinforcing Qualcomm’s market position and operational execution, and analysts and investors have taken note of the figures.
Context and implications
- Qualcomm delivered a modest revenue beat for the December quarter but flagged a weaker near-term revenue and EPS outlook tied to external memory price dynamics.
- Automotive demand is strong in the company’s guidance, but memory cost pressures are expected to persist through the year according to Wolfe Research.
- Wolfe Research also highlighted potential licensing headwinds and a phased decline in Apple-related revenue beginning in the September quarter, with a more meaningful impact expected in fiscal 2027.