San Diego, February 5, 2026
Qualcomm has reported a record revenue of $12.3 billion for the first fiscal quarter, marking a 5% increase from the previous year. Despite these strong earnings, the company cautions that ongoing memory chip shortages, primarily driven by demand from AI data centers, could impact future smartphone production and sales. Qualcomm is addressing these challenges by diversifying into sectors like automotive and IoT, which have shown robust growth. Investors reacted to the earnings report with some volatility in the company’s stock.
Qualcomm Reports Record Revenue But Faces Memory Chip Challenges
Despite strong quarterly earnings, ongoing supply constraints may impact future smartphone sales.
San Diego, California – Qualcomm has announced a remarkable revenue increase for the first fiscal quarter of 2026, showcasing the resilience and innovative spirit of local businesses. With a revenue of $12.3 billion, representing a 5% rise from the previous year, Qualcomm continues to push the boundaries of technology development in San Diego. However, as CEO Cristiano Amon noted, the persistent memory chip shortage—largely driven by surging demand from AI data centers—poses a significant threat to future smartphone production and sales.
This ongoing memory supply challenge underscores the broader implications for local entrepreneurs and the San Diego County economy. A more favorable regulatory environment could help alleviate some of these pressures, allowing companies to optimize production and meet the increasing demand for advanced technology products.
Record Revenue Amid Memory Constraints
In the quarter ending December 28, 2025, Qualcomm reported impressive financial performance, achieving $12.3 billion in revenue. This highlights the company’s ability to adapt and thrive amidst challenging market conditions. Despite this backdrop of success, Qualcomm has cautioned stakeholders about the ramifications of the memory chip shortage, asserting that the entire sector may face shortages that could hamper smartphone production in the upcoming fiscal periods.
Impact on Smartphone Sales
The memory shortage, which is expected to influence production schedules, is fueled by excessive demand stemming from the AI sector. This has not only driven up memory prices but also caused various smartphone manufacturers to scale back their production plans. Qualcomm anticipates that these supply constraints could extend into the current fiscal year, thereby influencing market availability and consumer prices up to 2027.
Diversification and Future Outlook
To counteract these challenges, Qualcomm is strategically diversifying its operations. The company is making significant inroads into sectors such as automotive technology, the Internet of Things (IoT), and data centers. Notably, Qualcomm’s automotive segment reported record revenues of $1.1 billion, marking a 15% increase from the previous year. Similarly, the IoT division continued to show robust performance, posting a 9% increase in revenues to $1.7 billion as demand surged across various consumer and networking products.
Stock Market Reaction
In the wake of the earnings report, Qualcomm’s stock reacted with volatility. Although the shares initially closed up over 1% at $148.89 per share, they fell by more than 9% during after-hours trading, reflecting investor sentiment surrounding the outlook on the ongoing memory chip shortage.
Background on Memory Supply Shortage
The global memory supply shortage, which began in 2024, is largely attributed to the explosive growth of AI services, leading to unprecedented demand for specialized memory components. This scarcity has had significant repercussions across consumer and enterprise markets, negatively impacting companies like Qualcomm and reiterating the importance of adaptive strategies in supply chain management.
Qualcomm’s Financial Performance
Despite grappling with these supply chain issues, Qualcomm’s strong financial performance in the first quarter of fiscal 2026 is a testament to the company’s resilient business model. By placing substantial focus on diversifying its product offerings, particularly in high-growth sectors like automotive and IoT, Qualcomm aims to offset any weaknesses in the smartphone sector. This commitment to innovation is essential for ensuring continued economic stability and growth in the San Diego area.
Conclusion
In summary, while Qualcomm celebrates record revenue, the ongoing memory chip shortage presents challenges that could impact the smartphone landscape. By strategically diversifying and focusing on emerging technologies, Qualcomm is positioning itself to not only navigate these difficulties but to thrive in varied markets. As the local economy continues to evolve, San Diego’s entrepreneurs and businesses are encouraged to seek out innovative solutions and adapt to changing market dynamics, fostering a prosperous business environment.
Frequently Asked Questions (FAQ)
What is Qualcomm’s revenue for the first fiscal quarter of 2026?
Qualcomm reported a revenue of $12.3 billion for the first fiscal quarter of 2026, a 5% increase from the previous year.
How is the memory chip shortage affecting Qualcomm?
The memory chip shortage, driven by increased demand from AI data centers, has led to higher memory prices and limited availability, impacting smartphone manufacturers’ production plans. Qualcomm forecasts that the shortage could persist through the current fiscal year, potentially affecting supply pressures into 2027.
What steps is Qualcomm taking to address the memory shortage?
Qualcomm is focusing on diversifying its business by expanding into sectors such as automotive, Internet of Things (IoT), and data centers. In the automotive sector, Qualcomm reported record quarterly revenues of $1.1 billion, up 15% year-over-year. The IoT segment also showed healthy growth, with revenues increasing 9% to $1.7 billion, driven by demand across consumer and networking products.
How did Qualcomm’s stock perform after the earnings announcement?
Following the earnings announcement, Qualcomm’s stock experienced a decline. The company’s shares closed up over 1% at $148.89 per share but fell over 9% in after-hours trading.
What is the global memory supply shortage?
The global memory supply shortage, which began in 2024, has been exacerbated by the rapid expansion of AI services, leading to unprecedented demand for specialized memory products. This has created scarcity in consumer and enterprise PC markets, affecting companies like Qualcomm.
Key Features of Qualcomm’s Financial Performance
| Feature | Details |
|---|---|
| First Fiscal Quarter 2026 Revenue | $12.3 billion, a 5% increase from the previous year. |
| Impact of Memory Shortage | Anticipated to affect handset production in the coming quarters. |
| Diversification Efforts | Expansion into automotive, IoT, and data centers, with record revenues in automotive and IoT sectors. |
| Stock Market Reaction | Shares closed up over 1% at $148.89 per share but fell over 9% in after-hours trading. |
| Global Memory Supply Shortage | Exacerbated by AI services, leading to scarcity in consumer and enterprise PC markets. |
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Author: STAFF HERE SAN DIEGO WRITER
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