Lower Apple demand and supply constraints weigh on near-term guidance as the chipmaker ramps up investments in AI computing.
Qualcomm has issued a weaker-than-expected forecast for the fourth quarter, citing a steeper decline in revenue from Apple. However, the company said its expanding artificial intelligence (AI) data centre, automotive, and other non-handset businesses are on track to fully offset the lost Apple revenue by fiscal 2027.
The guidance weighed on investor sentiment, with Qualcomm shares falling more than four per cent in after-hours trading. The company expects adjusted earnings per share of $2.05-$2.25 for the fourth quarter, below analysts’ estimate of $2.36. Revenue is projected between $9.7 billion and $10.5 billion, compared with expectations of $10.02 billion.
CEO Cristiano Amon attributed the lower Apple contribution to supply availability issues, saying Qualcomm’s share of components in the next iPhone will be well below its earlier estimate of 20 per cent. He also announced that the company plans to raise prices from September 1 to offset rising supply chain and manufacturing costs, though the pricing adjustments may temporarily pressure gross margins.
Qualcomm is increasingly shifting its focus beyond smartphones. The company targets $5 billion in annual AI data centre revenue by fiscal 2027 and $15 billion by 2029. Amon said wafer production has begun for two custom AI chips designed for hyperscale customers, with revenue incoming expected in the December quarter. Qualcomm has also completed tape-out of its first high-bandwidth compute chip, scheduled for launch in mid-2027.
For the third quarter, Qualcomm reported revenue of $9.95 billion, down 4 per cent year-on-year but above market estimates. Handset chip revenue fell 20 per cent to $5.09 billion, although it exceeded expectations. The company said improving Android demand helped offset part of the Apple weakness, but consumers shifting to older and lower-priced premium smartphones continued to impact margins.
