San Diego —Qualcomm shares fell more than 9 percent on Thursday, according to CNBC, after the chipmaker’s forecast for its fiscal first quarter fell short of Wall Street expectations even though its fourth-quarter results topped estimates. The drop came as the Nasdaq Composite fell 5.5 percent in a broad sell-off in chip and artificial intelligence stocks.
In its earnings release, filed with the Securities and Exchange Commission on Wednesday, Qualcomm forecast first-quarter fiscal 2027 revenue of $10.4 billion to $11.2 billion and non-GAAP earnings of $2.15 to $2.35 a share. Yahoo Finance reported that the earnings outlook fell short of analysts’ estimates. The midpoint of the per-share range, $2.25, is only modestly above the $2.17 the company earned in the quarter just ended.
Handsets shrink as automotive surges
For the fiscal fourth quarter ended Sept. 27, Qualcomm reported non-GAAP revenue of $10.44 billion, down 7 percent from a year earlier, and non-GAAP earnings of $2.17 a share, down 28 percent from $3.00. On a GAAP basis, revenue was $10.32 billion and earnings were $1.17 a share. Chief executive Cristiano Amon said revenue came in at the high end of the company’s guidance.
The mix underlines the shift Qualcomm is trying to make. Revenue from handset chips fell 26 percent to $5.14 billion, while automotive revenue rose 89 percent to a record $1.99 billion. Internet of things revenue rose 4 percent to $1.89 billion, and licensing revenue fell 7 percent to $1.30 billion. For the full fiscal year, GAAP revenue was $43.1 billion, down 3 percent.
Costs are a second pressure. The company said the semiconductor industry faces a broad-based increase in input costs, from wafer fabrication and packaging to memory, and that it is raising product prices in response. It does not expect the full benefit to show up in the gross margins of its chip business until the second half of fiscal 2027. Inventories stood at $8.64 billion at year-end, up from $6.53 billion a year earlier.
“Fiscal 2027 marks the start of our non-handset revenue inflection, including the ramp of our Data Center business. Non-handset revenues are projected to grow by more than 60% year-over-year, and we are reiterating our fiscal 2027 Data Center revenue target of $5B.”
Amon told CNBC that the company had $650 million in data center revenue in the quarter and that its constraint was supply rather than demand.
Arm falls despite beating its own guidance
Arm Holdings, which also reported on Wednesday, fell alongside Qualcomm, according to CNBC. The chip designer’s fiscal second-quarter revenue rose 27 percent to $1.443 billion, above its guidance of $1.38 billion plus or minus $50 million, and non-GAAP earnings of $0.52 a share topped its $0.47 forecast. Arm guided third-quarter revenue to $1.54 billion plus or minus $50 million. Royalty revenue grew 8 percent to $670 million, a gain the company said was partly offset by the effect of memory prices on the smartphone market.
The wider market backdrop was severe. The Nasdaq Composite closed at 24,315.00 on Thursday, down 5.52 percent, its worst day since April 2025, according to CNBC. The S&P 500 fell 4.36 percent to 7,353.73, and the Cboe Volatility Index rose to 28.18 from 16.61. CNBC tied the sell-off to concern that this week’s midterm election results could slow the AI data center buildout. Nvidia also fell more than 9 percent, while AMD, Micron and Applied Materials posted double-digit percentage declines, CNBC reported.
The Nasdaq has fallen about 12% since early October
Nasdaq Composite, daily
Source: Market data via Economy & Markets data tools
What to watch
The selling spread to Asia on Friday, where chipmakers including SK Hynix, Samsung and TSMC fell, according to CNBC. For Qualcomm, the next tests are whether its price increases rebuild chip margins on the timeline it has set out, and whether data center sales ramp fast enough to reach the $5 billion target for fiscal 2027 while handset revenue keeps shrinking.
