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New: Instantly spot drawdowns, dips, insider moves, and breakout themes across Maps and Screener.
Qualcomm reported first quarter fiscal 2026 financial results after the market closed this afternoon.
Management is less optimistic than analysts are about the company's growth in fiscal 2026.
The sell-off in Qualcomm stock provides a buying opportunity for patient investors.
Despite delivering better recent financial results than analysts had expected, Qualcomm (NASDAQ: QCOM) failed to excite investors with the near-term outlook it shared along with its Q1 2026 earnings report after the bell this afternoon. Shares are consequently tumbling in after-hours trading.
As of 5:22 p.m., Qualcomm stock is down 11.7% from its closing price of $148.89 during today's regular market session.
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Image source: Getty Images.
Qualcomm recognized in its Q1 2026 presentation that data center operators are contending with high demand for memory solutions due to the growth of artificial intelligence. Consequently, it stated that it sees "near-term uncertainty in memory supply and pricing for handset OEMs [original equipment manufacturers]." In addition, Qualcomm asserted, "We have seen several OEMs, especially in China, take actions to reduce their handset build plans and channel inventory."
As a result of the market dynamics stemming from the memory shortage, Qualcomm provided a more measured forecast second quarter 2026: revenue of $10.2 billion to $11 billion and adjusted earnings per share (EPS) of $2.45 to $2.65. This guidance reflects a more bearish outlook than the consensus among analysts that Qualcomm will report Q2 2026 revenue of $11.02 billion and adjusted EPS of $2.87.
In the first quarter 2026, Qualcomm reported revenue of $12.3 billion, a company record. At the bottom of the income statement, Qualcomm posted adjusted diluted EPS of $3.50, representing a 3% year-over-year increase.
For patient investors, the stock's pullback provides a great buying opportunity. The shortage of memory solutions will not last forever, and it won't irrevocably compromise Qualcomm's growth prospects. In fact, management stated that the company remains on track to meet its fiscal 2029 financial targets, including automotive business revenue of $8 billion (up from $2.4 billion in fiscal 2024) and Internet of Things business revenue of $14 billion (up from $5.4 billion in fiscal 2024).
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Qualcomm. The Motley Fool has a disclosure policy.
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