Qualcomm Cuts Profit Forecast as Apple Revenue Declines

Qualcomm Inc. forecast fourth-quarter adjusted profit between $2.05 and $2.25 per share, falling below Wall Street estimates of $2.36. The company reported that revenue from Apple products is declining faster than anticipated, with supply constraints expected to reduce Qualcomm's component share in the next iPhone launch to well below 20%.

Cristiano Amon, CEO of Qualcomm, attributed the revenue drop to these constraints and Apple's long-term strategy to replace Qualcomm modems with in-house components. To counter rising supply chain costs and margin declines, the company will raise prices effective September 1. Despite the weak outlook, Qualcomm reported third-quarter revenue of $9.95 billion and adjusted profit of $2.21 per share, beating analyst expectations despite a 4% year-over-year revenue decline.

To offset handset losses, Qualcomm is pivoting toward automotive and AI data-center markets. The company targets $5 billion in data-center revenue by fiscal 2027 and $15 billion by 2029, expecting non-smartphone categories to drive the majority of chip sales by 2027. Amon confirmed that wafer production for custom chip deals with hyperscale customers has begun, with revenue expected in the December quarter.