Qualcomm shares have dropped 5% since its fiscal first quarter report, now down almost 20% year to date. Despite exceeding quarterly expectations, guidance fell below Wall Street’s estimates due to the memory chip shortage impacting smartphone demand. This trend has led to declining EPS revisions, earning Qualcomm a Zacks Rank #5 (Strong Sell).

The global memory chip shortage is hurting smartphone demand, affecting Qualcomm’s core handset processor business. Original equipment manufacturers are reducing orders due to memory constraints, which is expected to impact sales. While upstream suppliers can raise prices during a shortage, downstream providers like Qualcomm rely on the scarce resource.

Qualcomm’s weak guidance for Q2, with revenue and EPS below consensus estimates, has raised concerns. Declining EPS revisions for fiscal 2026 and FY27 suggest more downside risk. The memory chip shortage, driven by AI data center demand, has forced Qualcomm to lower its guidance, impacting its largest revenue source – smartphone production.

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Read more at Nasdaq: Bear of the Day: Qualcomm (QCOM)