Why is Qualcomm stock sliding today?

Qualcomm stock is sliding 9.6% in pre-open trading to reach $156.58 after the chipmaker’s fiscal fourth-quarter earnings report, released after Wednesday’s close, revealed a sharp deterioration in smartphone chip revenue alongside forward guidance that missed analyst expectations on both earnings and margins.

While Q4 non-GAAP revenue of $10.44 billion and adjusted EPS of $2.17 narrowly cleared consensus estimates, handset chip revenue plunged 26% year-over-year to $5.14 billion, missing the $5.25 billion Wall Street had anticipated, and dragged the overall chip segment down 8%.

Looking ahead, management guided Q1 FY2027 EPS to a midpoint of $2.25, below the analyst consensus of approximately $2.32, and projected QCT chip-design operating margins to compress to 20%–22% from 24%, citing rising costs across wafers, packaging, and memory components.

Analyst sentiment heading into the print was already cautious. Bernstein analyst Stacy Rasgon had reiterated a Hold rating and cut his price target to $155 from $165 just days before the report, arguing that the Street’s handset outlook for the coming year was too optimistic and that near-term numbers needed a reset before data-center growth could become a meaningful earnings driver.

The margin guidance confirmed those concerns, as Qualcomm’s CFO Akash Palkhiwala noted that company-wide price increases intended to offset industry-wide semiconductor cost pressures would not fully benefit margins until the second half of fiscal 2027. Insider sales totaling roughly $5.7 million over the prior three months added a minor additional negative signal for some investors.

On the positive side, Qualcomm announced a multi-year agreement with SpaceX to supply radio equipment, baseband units, and software for Starlink Mobile’s planned nationwide terrestrial 5G network — a deal the company described as its biggest 5G infrastructure win to date — and automotive revenue surged 89% to a record $2 billion for the quarter.

However, these growth catalysts were not enough to offset the immediate concern over the smartphone cyclical trough and margin compression. The broader NASDAQ composite is down 0.4% today, providing a mildly negative backdrop for semiconductor names, while the S&P 500 is essentially flat, confirming that today’s QCOM move is driven overwhelmingly by company-specific factors.

Taken together, a headline earnings beat that masked a severe handset revenue shortfall, forward EPS guidance below consensus, and a significant step down in chip-design margins combined to erase the prior session’s 5.3% gain and push Qualcomm shares to their lowest pre-market level in recent weeks, as investors recalibrate expectations for the pace of the company’s transition away from its smartphone-dependent revenue base.