Qualcomm Posts Strong Q1 Outlook, Flags Samsung Modem Shortfall

Post by : Bianca Suleiman

Chipmaker Qualcomm issued an upbeat earnings forecast on Wednesday, citing a rebound in demand for high-end smartphones — yet investor enthusiasm was cooled by the disclosure that it expects to lose part of its Samsung modem business next year.

For the quarter ending in December, Qualcomm projected revenue near $12.2 billion and adjusted earnings of $3.40 per share, both ahead of LSEG consensus of $11.62 billion and $3.31 per share. The company said the stronger outlook reflects rising global purchases of premium devices able to run AI-driven applications.

CEO Cristiano Amon told investors Qualcomm anticipates supplying about 75% of modem chips for Samsung’s forthcoming Galaxy S26 series, down from full supply for the current Galaxy S25 models. The update sent Qualcomm shares down roughly 2.7% in after-hours trading after an intraday gain of about 4%.

Growth Beyond Smartphones

With Apple moving toward its own modems, Qualcomm has broadened its addressable market into PCs, automobiles and data-center processors. Amon confirmed engagement with a "large AI computing firm," signalling potential expansion into AI infrastructure.

In the most recent fiscal year, revenue outside Apple rose 18%, and handset chip revenue increased 14% to $6.96 billion, topping analyst estimates. CFO Akash Palkhiwala forecast handset revenue could expand by the low teens next quarter, implying at least $7.7 billion in sales.

AI Demand Drives Premium Phone Market

Amon attributed the company’s momentum to consumers trading up from mid-tier models to premium handsets capable of supporting new AI features. “You don’t have anything in the middle,” he said, pointing to a global shift in purchasing patterns seen in markets such as China and India.

For the fiscal fourth quarter ended Sept. 28, Qualcomm reported $11.27 billion in revenue and $3.00 in adjusted earnings per share, both above analyst forecasts.

While near-term indicators remain positive, the reduction in Samsung orders and Apple’s transition to proprietary modems introduce uncertainty to Qualcomm’s outlook. Still, demand tied to AI-enabled devices continues to underpin the company’s growth trajectory.