Qualcomm Shares Drop About 7% as Costs Pressure Earnings Outlook

Qualcomm shares fell about 7% in after-hours trading Wednesday after the chipmaker’s December-quarter earnings forecast came in below analyst expectations, with higher component and manufacturing costs weighing on profitability.

Qualcomm projected earnings per share of $2.15 to $2.35, putting the midpoint at $2.25 versus the $2.32 analyst average. Its revenue forecast of $10.4 billion to $11.2 billion had a $10.8 billion midpoint, above the $10.55 billion market estimate.

Rising costs for components and chip manufacturing are pressuring margins. Demand for memory chips tied to AI data centers has tightened supply. Qualcomm has raised prices on some products, but those increases have not yet fully offset higher input costs.

The latest quarter showed uneven results across its businesses. Smartphone chip revenue was $5.14 billion, down 26% from a year earlier. Automotive revenue reached $2 billion, up 89%, while connected-device revenue rose 4% to $1.89 billion. Phone chips still make up Qualcomm’s largest revenue segment.