Qualcomm Shares Drop Amid Higher Costs and Reduced Apple Revenue
Qualcomm shares fell about 5% after the chipmaker warned of higher memory costs and a sharper-than-expected decline in revenue from its partnership with Apple. Rising AI infrastructure spending has strained semiconductor supply chains, increasing expenses for components like wafers and packaging. Qualcomm plans to pass these cost increases on to customers through double-digit price hikes but expects margin pressures in the near term as contracts expire and new product cycles begin. For the current quarter, Qualcomm forecast adjusted profit per share between $2.05 and $2.25 — below analysts' average estimate of $2.36. The company also revised its modem chip share for Apple's upcoming iPhone downward to a level significantly lower than 20%, signaling faster-than-expected erosion in that business segment. Despite these challenges, Qualcomm remains optimistic about growth from AI and data center expansion, projecting non-handset revenue will grow more than 60% by fiscal 2027. However, analysts caution this diversification may take time to materialize due to lower margins on initial data-center programs.
Topics: AI infrastructure Apple costs margins semiconductors