Why Did Qualcomm Stock Plunge 5.56%?

On May 1, 2025, Qualcomm's stock experienced a significant drop of 5.56% in pre-market trading, reflecting investor concerns over the company's third-quarter revenue outlook.

Qualcomm's recent financial report for the second quarter showed impressive results, with revenue reaching $10.98 billion, a 16.9% increase year-over-year, and net income of $2.81 billion, up 20.6% from the previous year. The company's chip business saw an 18% increase in sales, while licensing revenue grew by 13%.

Despite these strong second-quarter results, Qualcomm's stock price fell sharply after the company provided a third-quarter revenue forecast that fell short of market expectations. The company projected revenue between $9.9 billion and $10.7 billion, with earnings per share ranging from $2.60 to $2.80. Analysts had anticipated higher figures, with an average estimate of $10.35 billion in revenue and $2.69 in earnings per share.

This discrepancy between the company's outlook and market expectations has led to a decline in investor confidence, resulting in the pre-market drop. The company's CEO attributed the cautious outlook to tepid demand for smartphone chips, a key segment of Qualcomm's business. This sentiment has been echoed by analysts, who have adjusted their target prices for Qualcomm's stock accordingly. HSBC, for instance, lowered its target price from $180 to $170 per share.