QCOM Stock Drops Nearly 8% After Hours — Qualcomm’s Q3 Earnings Miss, Weak Q4 Outlook Overshadows Revenue Beat

• Fourth-quarter EPS guidance missed consensus as higher memory costs and semiconductor input inflation pressured the outlook.
• Qualcomm expects its Apple modem revenue to decline faster than previously forecast.
• Stocktwits retail traders were divided, with some bracing for more downside while others remained confident in Qualcomm’s long-term prospects.

Shares of Qualcomm (QCOM) fell nearly 8% in after-hours trading on Wednesday after the chipmaker reported fiscal third-quarter earnings that narrowly missed Wall Street expectations, despite posting better-than-expected revenue.

The company also issued a weaker-than-expected earnings outlook for the fourth quarter, while adding that ongoing memory supply constraints and higher semiconductor input costs weighed on its outlook. 

QCOM Tops Revenue Estimates, Misses On EPS

Qualcomm reported fiscal third-quarter adjusted earnings per share (EPS) of $2.21, slightly below the consensus estimate of $2.22, according to Fiscal.ai. Revenue came in at $9.94 billion, ahead of analysts’ expectations of $9.67 billion.

The company said that despite a challenging memory and supply environment, its third-quarter results reflected solid execution of its growth strategy, with revenue landing at the high end of its guidance. Qualcomm added that it remains on track to grow total non-handset revenue to $40 billion by fiscal 2029, nearly doubling the target it shared in November 2024. It also expects year-over-year growth in non-handset revenue, including data center, to accelerate from 24% in fiscal 2026 to more than 60% in fiscal 2027.

QCOM Issues Light Q4 Earnings Guidance

For the fiscal fourth quarter, Qualcomm forecast adjusted EPS of $2.05 to $2.25, below the consensus estimate of $2.38, according to Fiscal.ai. The company expects revenue between $9.7 billion and $10.5 billion, compared with analysts’ expectations of $10.08 billion.

Qualcomm said the semiconductor industry is facing broad-based increases in input costs across wafer fabrication, assembly, testing, advanced packaging, memory and other materials. The company said it is adjusting product pricing to reflect the higher costs and expects those changes to support gross margins over time. It added that these factors are reflected in both its fiscal third-quarter performance and fourth-quarter guidance.

AAPL Revenue Decline To Accelerate

Qualcomm said supply constraints are expected to accelerate the decline in revenue from Apple beginning in the fourth fiscal quarter. The company said its modem chip share in the next iPhone launch is now expected to be materially lower than its previous estimate of 20%, resulting in a steeper drop in Apple-related revenue than it had previously anticipated.

The company also said revenue from Chinese phone makers bottomed in the third quarter and should rise by double digits in the fourth quarter.

QCOM Stock: Retail Chatter Mixed After Earnings

On Stocktwits, retail sentiment for QCOM was ‘bullish,’ unchanged in the past 24 hours, while message volume was ‘normal’ at the time of writing.

Retail chatter was mixed following the earnings report.

One trader expected further downside, saying the stock was unlikely to recover immediately and could open in the $130 range on Thursday.

Another retail trader said Qualcomm’s long-term growth story depends on its ability to successfully expand its data center business. “Pricing power may help near-term margins, but the bigger test is building a real non-handset business.”

A third trader said the recent pullback had left them with a larger position than initially planned after averaging down. Despite the decline, the trader remained “highly confident” about Qualcomm’s long-term prospects.

QCOM stock has lost around 10.5% year-to-date.

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