Qualcomm shares advanced on Friday, closing at $140.70 for a gain of 1.6%. Trading volume exceeded 13 million shares, surpassing the 50-day average. Despite the positive session, the stock continues to trade approximately 32% below its 52-week high.
Market Context and Near-Term Catalysts
U.S. markets will be closed Monday for the Washington's Birthday holiday, with trading resuming Tuesday. Investor focus is shifting to Samsung Electronics' Galaxy Unpacked event scheduled for February 25 in San Francisco. The launch of the new Galaxy S series is a significant indicator for premium Android handset demand, a key market for Qualcomm's chipset business.
Memory Supply as a Critical Constraint
Qualcomm's recent outlook has highlighted memory chip availability as a primary concern rather than traditional competitive dynamics. CEO Cristiano Amon noted that device manufacturers, particularly in China, are reducing inventory levels to adjust to tight memory supply. This shortage is impacting the broader industry; research firm Counterpoint projects a 7% decline in high-end smartphone chip shipments for 2026, with elevated memory costs pressuring new device production. Analysts from firms including J.P. Morgan warn these constraints could extend into 2027.
For its March quarter, Qualcomm provided revenue guidance between $10.2 billion and $11.0 billion, with adjusted earnings per share estimated from $2.45 to $2.65. These forecasts fell short of analyst expectations, with the company explicitly citing memory limitations as a drag on handset demand.
Analyst Sentiment and Stock Performance
The stock has experienced volatility since its guidance reset in early February, including a single-day decline of over 8%. Shares have recently traded in a range between $136 and $141. Daiwa Securities recently downgraded Qualcomm to Neutral from Outperform, assigning a $140 price target, a level the stock approached ahead of the long weekend.
Looking ahead, the stock's trajectory may depend on clearer signs of easing memory supply. A sustained shortage or further price increases could lead phone makers to delay orders, potentially affecting Qualcomm's future handset revenue with a lag. After the holiday, traders will monitor supply chain updates and analyst commentary, with Samsung's event serving as the next major milestone for assessing near-term shipment trends.
