Qualcomm’s Reality Check: It’s Not Always Rainbows & 5G

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So, Qualcomm ([QCOM +1.16%]) just reported earnings. Numbers were…fine. Like, “brought a casserole to the potluck” fine. Analysts expected a soufflé, apparently. But here’s the thing about soufflés, and quarterly reports: they both require perfect conditions. And right now, the conditions are less “MasterChef” and more “Nailed It!” The stock is currently experiencing a gravitational pull downward in after-hours trading. A solid 11.7% drop as of 5:22 PM. That’s… noticeable.

Apparently, AI Needs All the Memory

The problem, as Qualcomm delicately explained, isn’t that they’re messing up. It’s that everyone and their robot overlords want memory chips. Data centers are apparently having a full-blown memory crisis because, surprise, artificial intelligence is a hungry beast. They’re saying there’s “near-term uncertainty” in memory supply. Which, translated from corporate-speak, means “we’re scrambling.” And some Chinese handset manufacturers are scaling back orders. Because, you know, inventory. It’s a thing.

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So, for the second quarter of 2026, they’re predicting revenue of $10.2 to $11 billion and adjusted earnings per share of $2.45 to $2.65. Analysts were hoping for $11.02 billion and $2.87. It’s the difference between a perfectly acceptable vacation and a trip to the DMV. First quarter, though, they did manage a record $12.3 billion in revenue, and $3.50 EPS. Which, let’s be honest, is a good story to tell at a cocktail party, even if the next chapter looks a little less sparkly.

Should You Panic Sell? (Spoiler: Probably Not)

Look, I’ve seen more market volatility than a TikTok influencer. This dip is a chance for patient investors to do something sensible. The memory shortage isn’t permanent, and Qualcomm isn’t going to suddenly forget how to make chips. They’re still projecting some impressive growth by 2029 – $8 billion in automotive revenue (up from $2.4 billion) and $14 billion in IoT (up from $5.4 billion). That’s a lot of connected toasters. So, before you start building a bunker and hoarding canned goods, remember: tech cycles are like fashion trends. Everything goes out of style eventually, but good companies usually find a way to reinvent themselves. And, frankly, I’m betting on Qualcomm being able to navigate this. Mostly because I’m invested.

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2026-02-05 02:22