Qualcomm Q3 Forecast Disappoints; CEO Says Worst of Chip Crunch Over

Qualcomm (QCOM) forecast third-quarter revenue and adjusted profit below Wall Street expectations on Wednesday, as the chipmaker braces for a hit to demand stemming from a shortage of memory chips used in consumer electronics. But in an interview with Reuters, Qualcomm CEO Cristiano Amon said the company was confident that the smartphone market will start to rebound after its fiscal third quarter.

"We can now call the bottom," Amon said, adding that the company's licensing business, which beat Wall Street estimates, gives it insights into smartphone makers' plans for later in the year.

Key Financial Metrics

Highlights from the Statement

Qualcomm attributed the weak guidance to memory chip shortages affecting demand for its products, particularly in consumer electronics. However, strong licensing revenue signals that smartphone makers are planning new product launches later in the year.

Future Guidance

Qualcomm expects the smartphone market to begin recovering after the fiscal third quarter, as memory chip supply and demand conditions improve.

Impact on Stock

Qualcomm shares (QCOM) may face near-term pressure due to the disappointing guidance, but CEO Amon's comments about a market bottom could limit downside.

What This Means for Investors

Qualcomm's forecast highlights ongoing challenges in the chip market, but the "bottom" signal may offer an entry point for long-term investors. Focus remains on smartphone market recovery and licensing revenue as growth drivers.