Qualcomm shares fell sharply in after-hours trading on November 4, 2026, even though the chipmaker beat Wall Street expectations for quarterly earnings. The sell-off was driven by a 26 percent drop in handset chip sales and a first-quarter forecast that assumed no further chip sales to Apple. Investors focused less on the earnings beat and more on what the numbers said about the smartphone market, where rising memory costs are pushing up phone prices and slowing purchases.
For the fiscal fourth quarter ended September 27, Qualcomm reported adjusted earnings of 2.17 dollars per share, just above the 2.16 dollars analysts expected, and adjusted revenue of 10.44 billion dollars. Handset chip revenue fell to 5.14 billion dollars from 6.96 billion dollars a year earlier, missing analyst estimates of about 5.25 billion dollars. Qualcomm guided to first-quarter adjusted earnings of 2.15 to 2.35 dollars per share, with a midpoint of 2.25 dollars, below the consensus of about 2.27 dollars. The stock had closed the regular session up 5.33 percent at 173.19 dollars, then traded near 160.25 dollars in extended trading, down about 7.5 percent.
Quick Facts
| Detail | What is known |
|---|---|
| Company | Qualcomm, San Diego based chipmaker |
| Quarter reported | Fiscal fourth quarter, ended September 27, 2026 |
| Adjusted earnings | 2.17 dollars per share, versus 2.16 dollars expected |
| Adjusted revenue | 10.44 billion dollars, down 7 percent year over year |
| Handset chip revenue | 5.14 billion dollars, down 26 percent year over year |
| Prior year handset revenue | 6.96 billion dollars |
| First-quarter earnings guidance | 2.15 to 2.35 dollars per share |
| First-quarter revenue guidance | 10.4 to 11.2 billion dollars |
| Regular session close | 173.19 dollars, up 5.33 percent |
| After-hours move | Down more than 7 percent, near 160.25 dollars |
| Apple assumption | Forecast includes no further chip sales to Apple |
| Full year revenue | 43.1 billion dollars, down 3 percent |
Why a Beat Still Sent the Stock Down
An earnings beat usually lifts a stock, but Qualcomm gave investors two reasons to sell. First, the handset business, which remains its largest profit engine, shrank far more than expected. A 26 percent fall in handset chip revenue is not a rounding error. It tells the market that phone makers are ordering fewer chips, and that consumers are holding on to their phones for longer. Second, the forecast for the current quarter disappointed on profit. The midpoint of 2.25 dollars per share fell short of the 2.27 dollar consensus, and analysts pointed to a weak margin outlook as a key reason for the decline.
Bernstein analyst Stacy Rasgon said the shares declined because the margin outlook was poor, according to reports of the call. Anshel Sag of Moor Insights and Strategy said the handset drop was the main reason for the fall. Both explanations point to the same problem. Qualcomm can beat a quarterly estimate, but if the next quarter looks softer and the core business is shrinking, investors will reprice the stock right away. That is exactly what happened in after-hours trading, and the selling then spread to memory chip stocks overnight, with Micron, Sandisk and SK hynix each falling about 2.5 percent in overnight trading after steep losses in the regular session.
The Smartphone Slump Behind the Numbers
The deeper story is the smartphone market itself. Reuters, citing Counterpoint Research figures, reported that worldwide smartphone shipments fell 20 percent in the September quarter to their lowest level in 14 years. The reason given was surging memory chip costs, driven by booming demand from AI data centers. When memory gets more expensive, phones get more expensive, and buyers delay upgrades. Qualcomm raised its own chip prices in September, but that could not offset weaker volumes.
Chief Executive Cristiano Amon told Reuters that sales of Android handsets in China had bottomed out and were ticking upward again, and that the company expects revenue outside handsets to eventually replace Apple entirely. That is a long-term reassurance, not a short-term fix. For now, handsets still dominate Qualcomm revenue, and a flat handset market forecast for 2027, as reported from the call, gives investors little reason to pay up for growth. Automotive revenue surged 89 percent year over year to 1.99 billion dollars, and data-center related revenue reached about 650 million dollars in the quarter, but those lines are still much smaller than handsets.
What the Apple Change Really Means
One of the most watched details in the report was Apple. Qualcomm said its first-quarter forecast includes no further sales to Apple, and that it renewed long-term patent license agreements with Apple, Huawei and Transsion. Its annual report said patent licenses with key phone makers now run out between fiscal 2030 and 2033. Investors should be careful to separate two different things here. Chip sales are about hardware shipped in phones. Patent licenses are about the right to use Qualcomm technology, and those agreements were renewed.
The end of chip sales to Apple is therefore a revenue mix change, not a sudden loss of all Apple income. Still, it removes a major customer from the chip order book at a time when the handset market is already weak. That is why analysts treated it as a negative, even though Qualcomm framed non-handset growth as the replacement. The company also guided to 650 million dollars in data-center sales for the fiscal first quarter, above analyst expectations of about 539 million dollars, which shows where management wants the growth story to go next.
How the Wider Chip Market Reacted
Qualcomm did not fall alone. Arm and GlobalFoundries also struggled after their own results, and memory stocks extended losses overnight after Qualcomm added to worries about consumer electronics demand. The pattern is familiar in chip cycles. When one large supplier warns about handset demand, the whole supply chain gets repriced, from memory makers to component suppliers. Wednesday had already been a brutal session for memory stocks, with Micron down 7 percent, Sandisk down 8 percent and SK hynix down 5 percent, after Democratic midterm victories raised concerns about tighter restrictions on data-center construction.
Qualcomm results then added a second worry on top of the first. Data centers are booming, but they are also soaking up memory supply and pushing up costs for phones and PCs. That squeeze helps memory makers on price in the short term, but it hurts unit volumes for phone chip suppliers. Until memory prices ease or phone demand recovers, chip investors are likely to stay cautious about handset-exposed names, even when those companies beat headline earnings.
What to Watch Next
Three things will decide whether this sell-off is a buying opportunity or the start of a longer slide. The first is the margin recovery. Finance chief Akash Palkhiwala said baseline gross margin should return to its historical 48 to 50 percent range by the second quarter as chip price increases take effect. If that happens, profit forecasts can stabilize. If it slips, the stock will stay under pressure.
The second is handset volumes in the holiday quarter. Qualcomm forecast chip segment sales of 9.0 to 9.6 billion dollars, above estimates of 8.88 billion dollars, which suggests management still expects a decent quarter in absolute terms. The third is non-handset growth. Automotive, the Internet of Things, and data-center sales need to keep growing fast enough to offset a flat or shrinking phone market. If they do, Qualcomm can credibly argue that it is becoming less of a phone company over time. If they do not, the Apple change will loom larger in every future report.
Frequently Asked Questions
Did Qualcomm beat earnings expectations?
Yes, on the headline numbers. Adjusted earnings of 2.17 dollars per share beat the 2.16 dollar consensus, and adjusted revenue of 10.44 billion dollars beat estimates of about 10.11 billion dollars. The stock still fell because handset sales missed and the profit forecast was light.
Why did handset chip sales fall 26 percent?
Handset chip revenue fell to 5.14 billion dollars from 6.96 billion dollars a year earlier. Reports tied the drop to sluggish phone demand, declining Apple-related revenue, and a 20 percent fall in global smartphone shipments in the September quarter as memory costs pushed up phone prices.
Is Qualcomm losing Apple completely?
No, not completely. The forecast assumes no further chip sales to Apple, but Qualcomm renewed long-term patent license agreements with Apple, Huawei and Transsion. Chip sales and patent licenses are separate revenue streams.
What did Qualcomm forecast for the current quarter?
Qualcomm guided to first-quarter adjusted earnings of 2.15 to 2.35 dollars per share on revenue of 10.4 to 11.2 billion dollars. The earnings midpoint of 2.25 dollars was below the consensus of about 2.27 dollars, while the revenue midpoint was above the average estimate.
Sources
TipRanks reported the overnight memory stock losses, the Qualcomm handset figures, and the earnings guidance. SiliconANGLE reported the after-hours fall, the guidance midpoint, and the wider chip reaction. Reuters via TradingView reported the Counterpoint shipment figures, the Apple forecast detail, and the margin comments from analysts.
Final Thoughts
Qualcomm delivered a quarter that looked fine on the surface and weak underneath, and the market judged the underneath. A 26 percent handset decline, a light profit forecast, and no further Apple chip sales in the outlook are a hard combination to overlook, even with automotive growth and a promising data-center line. The company still has real strengths, including a strong balance sheet story, renewed patent licenses, and growing non-handset businesses. But until phone volumes recover or margins return to their historical range, investors will treat Qualcomm as a company in transition, and transitions rarely get the benefit of the doubt on earnings night.
Read more on the site: McDonald earnings and US sales and CVS Health split into two companies.
