Qualcomm just delivered a stark warning that's rattling the smartphone industry: memory shortages are now defining the size of the entire mobile market. Despite beating fiscal Q1 earnings expectations with $12.25 billion in revenue, the chipmaker's shares tumbled in after-hours trading after CEO Cristiano Amon told investors that data center demand for AI memory is starving smartphone makers of critical components. The guidance miss signals a supply crunch that could reshape handset pricing and availability throughout 2026.
Qualcomm delivered a reality check on Wednesday that sent shockwaves through the smartphone industry. The chipmaker beat fiscal first-quarter earnings expectations with adjusted EPS of $3.50 versus $3.41 expected and revenue hitting $12.25 billion. But none of that mattered once investors saw the guidance.
For the current quarter, Qualcomm expects revenue between $10.2 billion and $11 billion - well short of the $11.11 billion analysts had penciled in, according to LSEG consensus data via CNBC. Adjusted earnings per share are forecast at $2.45 to $2.65, missing the $2.89 consensus. Shares tumbled in after-hours trading.
The culprit? A global memory shortage that's pitting AI data centers against smartphone makers in a battle for DRAM and NAND supply. "We're starting to see that memory is going to define the size of the mobile market," CEO Cristiano Amon told CNBC in an interview following the results.
Qualcomm CFO Akash Palkhiwala was even more direct, saying the guidance gap versus Wall Street estimates was driven entirely by the memory issue. Big orders for high-bandwidth memory (HBM) used in AI accelerators are consuming production capacity that would normally go to consumer electronics, creating a ripple effect across the smartphone supply chain.
