Qualcomm Slides as Weak Q2 Outlook And Memory Market Headwinds Trigger Analyst Downgrades, Price Target Revisions

JPMorgan analyst Samik Chatterjee trimmed the 12-month price target for Qualcomm to $185 from $195 while retaining an ‘Overweight’ rating, citing challenges in the wider smartphone industry amid tightening DRAM availability.

• Wells Fargo analyst Aaron Rakers cut his price target to $135 from $165 and emphasized ongoing memory supply concerns that are pressuring handset guidance.
• Susquehanna analyst Christopher Rolland downgraded the stock to ‘Neutral’ from ‘Positive’, sharply lowering his price target to $140 from $210.
• Bank of America pointed to continued weakness in the handset sector, noting that demand pressures appear both cyclical and structural.

Qualcomm Inc. (QCOM) stock saw a slew of price target and rating changes from Wall Street as the chipmaker navigates headwinds in the memory market.

For the second quarter (Q2), Qualcomm expects adjusted earnings per share (EPS) in the range of $2.45 to $2.65, and revenue between $10.2 billion and $11.0 billion, both below the analysts’ consensus estimate of $2.87 and $11.02 billion, respectively, according to Fiscal AI data. 

“In the coming quarters, the handset industry will be constrained by the availability and pricing of memory, particularly DRAM.”

-Cristiano Amon, President and CEO, Qualcomm

Market Sentiment Shifts After Earnings And Headset Pressures

JPMorgan analyst Samik Chatterjee trimmed the 12-month price target for Qualcomm to $185 from $195 while retaining an ‘Overweight’ rating on the stock, according to TheFly.  

The firm noted that management pointed to challenges in the wider smartphone industry as memory producers shift capacity toward high-bandwidth memory, tightening DRAM availability.

Meanwhile, Wells Fargo analyst Aaron Rakers cut his price target to $135 from $165 and kept an ‘Underweight’ rating. The firm emphasized ongoing memory supply concerns that are pressuring handset guidance, as well as potential reductions in modem content with Apple’s iPhone lineup, a key driver of Qualcomm’s revenue.

Qualcomm stock traded over 7% lower by Thursday mid-morning. However, on Stocktwits, retail sentiment around the stock changed to ‘extremely bullish’ from ‘bullish’ territory the previous day. Message volume shifted to ‘extremely high’ from ‘high’ levels in 24 hours. 

Susquehanna And Bank of America Downgrade Qualcomm

Susquehanna analyst Christopher Rolland downgraded the stock to ‘Neutral’ from ‘Positive’, sharply lowering his price target to $140 from $210. Rolland said the firm is choosing to remain on the sidelines as Qualcomm navigates what he described as a “memory-related handset storm.” 

Bank of America downgraded Qualcomm to ‘Neutral’ from ‘Buy’ and slashed its price target to $155 from $215. The firm pointed to continued weakness in the handset sector, noting that demand pressures appear both cyclical and structural.

QCOM stock has declined 20% in the last 12 months. 

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