Qualcomm stronger than ever but warns: smartphone market limited by prices and memory availability

It’s not often to see a company report a record revenue and, at the same time, watch its stock price plunge 11%.

It’s exactly the paradox that struck Qualcomm during the presentation of results for the first fiscal quarter of 2026.

Despite the CEO Cristiano Amon opening the conference by rattling off impressive figures, with revenues that reached the historical peak of $12.3 billion, investors’ enthusiasm ran into a wall of realism: the DRAM memory crisis is really serious.

Qualcomm announces record revenues but loses 11% in the stock market — What happens?

The excellent results, driven by sales of premium smartphones and growing interest in smart glasses and the automotive sector, were quickly overshadowed by forecasts for the immediate future.

Amon issued a warning that chilled the room: the coming quarters will see the mobile phone industry forced to slow down. The culprit isn’t the lack of innovation, but a purely logistical and economic issue related to components.

Memory manufacturers, in fact, are massively redirecting their production capacity toward data centers destined for artificial intelligence, drastically reducing the supply of DRAM for consumer devices. The law of supply and demand has acted brutally, driving prices higher.

As a result, numerous smartphone manufacturers, with a particular concentration in China, have decided to adopt an extremely cautious approach, reducing Qualcomm chipset inventories to avoid accumulating components that cannot be assembled at competitive costs.

The CFO Akash Palkhiwala has confirmed this trend, explaining that customers are scaling back their plans, which inevitably translates into fewer orders for the San Diego-based giant.

The supply crisis, not demand

The impact of this prudence will weigh heavily on the second quarter fiscal. Qualcomm’s guidance places revenues between $10.2 and $11 billion, a meaningful decline compared with the $11 billion earned in the same period last year.

The most alarming figure concerns the smartphone chip segment: last year it generated $6.9 billion, this year the company expects to settle at $6 billion.

However, management’s analysis offers a less catastrophic reading for the long term.

Amon stressed that the slowdown of manufacturers does not reflect a drop in consumers’ willingness to buy. Final demand exists and is solid. The problem lies exclusively in companies’ ability to source memory at prices that allow maintaining profit margins.

Thus, it is a supply crisis not a demand crisis, a detail that suggests a possible recovery as soon as the supply chain stabilizes.

The diversification bet

While artificial intelligence is causing upheaval in the smartphone supply chain, Qualcomm is trying to ride the positive wave on other fronts.

The company is aggressively working on its AI inference processors, with shipments already underway to the client Humane and negotiations underway with major cloud service providers and hyperscalers. Although meaningful revenues from this sector will arrive only next year, the direction is clear.

Amon’s focus is set on the horizon of 2029, the year in which the company expects to have completed a crucial transformation, reducing its historical reliance on the mobile market. Robotics, automotive sector and patent licenses are the pillars on which Qualcomm intends to build its future stability.

For now, however, the present remains anchored to the fortunes of the smartphone, and the market’s nervous reaction, which brought the stock price around $134, shows how long and winding the path to diversification still is.