Coverage spread: 2 sources — 2 center
Lean ratings via AllSides / Media Bias-Fact-Check. How this works.
What happened
Qualcomm’s stock fell in extended trading after the chipmaker reported fiscal third-quarter earnings for 2026 that matched Wall Street expectations but paired them with weaker-than-hoped guidance for the current quarter. The company pointed to a broad, industry-wide supply crunch in computer components — particularly memory chips — as the main culprit squeezing profitability.
For the current quarter, Qualcomm guided to adjusted earnings per share of $2.05 to $2.25 on revenue of $9.7 billion to $10.5 billion. That fell short of analyst estimates compiled by LSEG, which had projected $2.36 in adjusted EPS on $10.02 billion in sales. In its release, Qualcomm said the semiconductor industry is facing a “broad-based increase in input costs” spanning wafer fabrication, assembly, testing, advanced packaging, memory and other materials, even as it noted that overall revenue “continues to be healthy.”
CEO Cristiano Amon told CNBC the company is taking direct action to protect margins, including an across-the-board price increase on Qualcomm’s chips — most of which go into smartphones — effective September 1. “Cost went up, prices are going to go up,” Amon said, describing the move alongside efforts to streamline the company’s supply chain. He characterized the pressure as “a temporary, short-term thing we are addressing with price increases.”
Amon also detailed how rising memory prices are reshaping smartphone demand. He said affordability issues have made low-end and mid-priced phones less competitive, and that even buyers of premium Android devices — where Qualcomm’s chips dominate — are increasingly opting for cheaper models or holding onto last year’s phone rather than upgrading, a shift he attributed directly to memory price increases.
Segment results underscored the strain: handset chip sales came in at $5.1 billion, down 20% year-over-year, which Qualcomm attributed partly to a bottoming out in the China market. By contrast, the automotive business was a bright spot, generating $1.59 billion in sales; the company reiterated a goal announced in June of reaching $10 billion in annual automotive revenue by 2029, and it unveiled a new chip supply agreement with BMW for digital cockpit systems. Qualcomm also confirmed it remains on track to hit $5 billion in data-center revenue next year and said it has closed its acquisition of Modular, a software company focused on AI programming tools, with more AI-related announcements expected. The company reiterated a broader strategic goal of pushing non-smartphone businesses — automotive, data centers, smart glasses and robotics — to make up 60% of total revenue next year.
How the coverage compares
CNBC’s account is the most detailed of the two sources, built substantially around direct quotes from Amon and specifics on guidance, segment revenue, and the BMW and Modular deals. It frames the story primarily as a margin story tied to input costs across the semiconductor supply chain, not just memory, while emphasizing management’s characterization of the issue as temporary and addressable through pricing action.
MarketWatch’s headline signals a similar diagnosis — describing “memory woes” as the factor weighing on earnings — but no article text was available from that outlet in the material reviewed here, so it’s not possible to compare its specific figures, quotes, or framing choices against CNBC’s. Based on the headline alone, MarketWatch appears to hang the story more squarely on memory chip costs specifically, whereas CNBC’s reporting shows Amon and Qualcomm’s own release attributing the pressure to a wider basket of rising costs (wafers, assembly, testing, packaging, memory, and other materials), with memory singled out only as one especially visible piece of a larger cost problem.
Both outlets agree on the core facts as reported: an in-line quarter, disappointing forward guidance, and a stock decline tied to cost pressures rather than a demand collapse — Qualcomm itself insists revenue trends remain healthy.
Why it matters
The results highlight how a global squeeze on memory chip supply and pricing — a dynamic already reshaping costs across the electronics industry — is now visibly denting margins at one of the world’s largest mobile chipmakers and altering consumer behavior in the smartphone market, pushing buyers toward cheaper or older devices. Qualcomm’s response, a direct price increase to customers starting September 1, signals that chipmakers may pass these costs down the supply chain rather than absorb them, which could eventually affect device prices for consumers.
The report also underscores Qualcomm’s broader strategic pivot away from dependence on smartphones — where handset revenue fell 20% year-over-year — toward automotive, AI data centers, and other diversification bets like the Modular acquisition and the new BMW cockpit-chip deal. Whether that diversification, targeted to reach 60% of revenue next year, can offset near-term margin pressure from the memory and broader component cost crunch is likely to remain a key question for investors going forward.
Sources
Featured photo: Coolcaesar via Wikimedia Commons (CC BY-SA 4.0)