Qualcomm Shares Slide Nearly 9% Amid Conservative Forecast and Trade War Fears

Qualcomm, the world's largest smartphone chip maker, witnessed a downturn in its stock price following a subdued revenue forecast. This forecast has intensified fears that tariffs might affect product demand. On May 1st, before regular trading hours, Qualcomm's shares fell by 8.92%, amplifying concerns surrounding an impending trade war and its potential repercussions on the smartphone market.

For the fiscal quarter ending in March 2025, Qualcomm reported revenues of $109.8 billion, a 16.9% year-over-year increase, surpassing market expectations. Net income climbed to $28.1 billion, reflecting a boost of 20.9% compared to the previous year. Adjusted earnings per share reached $2.85, exceeding anticipated figures.

Despite these positive earnings, the company's outlook for the subsequent quarter appears conservative. Revenue projection for the third fiscal quarter lies between $99 billion and $107 billion, slightly below the previously forecasted $103.3 billion. Expected earnings per share range from $2.60 to $2.80, bordering below analysts’ estimates. Consequently, Qualcomm shares fell over 5% in pre-market trading.

CEO Cristiano Amon noted that as Qualcomm navigates the current macroeconomic climate, the focus remains on its tech roadmap, premium product range, and solid customer relationships. Although Qualcomm has not faced immediate impacts from tariffs, CFO Akash Palkhiwala highlighted the unpredictable nature of tariff's indirect effects.

Qualcomm's processor and modem chips are integral components of high-end Android smartphones. While growth in the smartphone sector has slowed, these components are prominent in premium devices. Alongside, Qualcomm charges royalties based on phone costs, irrespective of whether its chips are used. These rights, established through intellectual property victories, allow the company to earn from fundamental smartphone connectivity patents.

Under Amon's leadership, the company strives to reduce its dependency on the mobile market by exploring new sectors such as automotive chip sales and artificial intelligence-based processors for laptops.