Q2 earnings guidance weak, Qualcomm (QCOM.US) drops over 10% pre-market.

On Thursday, Qualcomm (QCOM.US) dropped over 10% in pre-market trading, nearly 13% down for the year, at $133. In the news, Qualcomm issued a weak earnings forecast for the current quarter, which heightened market concerns about storage chip shortages leading to higher prices and further suppressing smartphone demand. The earnings report showed that for the first quarter ending December 28, 2025, Qualcomm’s revenue increased 5% year-over-year to $12.25 billion, beating the analyst average estimate of $12.18 billion; adjusted net income was $3.78 billion, down 1% year-over-year; adjusted earnings per share were $3.50, better than the analyst average forecast of $3.40.

Looking ahead, Qualcomm expects revenue for the second quarter ending March to be between $10.2 billion and $11 billion, below the analyst average estimate of $11.2 billion; it also expects adjusted earnings per share to be between $2.45 and $2.65, also below the analyst average forecast of $2.89.

Qualcomm stated that although demand for high-end smartphones remains, due to tight supply and soaring prices of storage chips, some customers’ phone production will be below expectations. Despite CEO Cristiano Amon pushing the company toward diversification by increasing chip sales for automotive, PCs, and data centers, these new businesses are not yet large enough to offset the slowdown in the mobile chip market. However, Amon said in a statement, “While our smartphone chip business outlook in the short term is affected by industry-wide storage chip supply constraints, we remain encouraged by demand for high-end smartphones.”