Qualcomm shares slide as Apple modem shift, tariffs raise growth concerns
fell nearly 5% before the bell on Thursday as the looming loss of Apple as its biggest modem customer outweighed its upbeat quarterly forecast.
The San Diego-based chip supplier warned investors that Apple's move to depend on in-house modems, starting with the February launch of the
iPhone 16e
, would hit future chip revenue.
Qualcomm has intensified its focus on sectors such as data centers and personal computers.
Adding to the pressure, U.S. President Donald Trump's renewed tariff threats on semiconductors have emerged as a risk, potentially disrupting supply chains and hurting Qualcomm's handset revenue, analysts said.
While smartphones and semiconductor chips have so far been exempt from these levies, Trump recently warned he would "soon announce tariffs on semiconductors," raising concerns of sector-specific duties.
CFO Akash Palkhiwala told Reuters that the company hasn't seen early chip orders yet, suggesting customers aren't rushing to beat possible tariffs.
"Tariffs could trim mid-single digits off handset revenue, but Chinese OEMs (original equipment manufacturers) still view (Qualcomm's mobile phone chip) Snapdragon as essential for global 5G and AI-on-device marketing," said Michael Ashley Schulman, CIO at Running Point Capital.
Qualcomm, the world's largest supplier of modem chips and seen as a bellwether for smartphones, said chip sales to non-Apple customers have risen more than 15% this fiscal year, driven by premium Android launches.
"We see durable share at Samsung and an extended collaboration with Xiaomi as key support in the handset segment as Apple chipset revenue comes out of the model," TD Cowen analysts said.
Qualcomm is also expanding in augmented reality.
CEO Cristiano Amon said the company now supports 19 augmented reality designs including META's Ray-Ban smart glasses and expects that number to grow.
The company's 12-month forward price-to-earnings ratio is 13.36, trailing Nvidia's 34.91, Intel's 47.14 and Advanced Micro Devices 35.33, according to data compiled by LSEG.
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