Qualcomm shares advanced 0.5% to $139.61 during Tuesday's session, showing modest recovery following a period of significant price swings driven by concerns over smartphone demand and component availability.
Analyst Downgrade Highlights Risks
Morgan Stanley resumed coverage of the chipmaker with an underweight rating and a $132 price target. The firm warned that memory shortages could create "a tough Android environment" later this year, noting that handset volumes appear likely to be pressured by tight memory supply. The bank also pointed to Apple share loss and Qualcomm's still-small automotive business as challenges for investors seeking growth offsets.
This cautious outlook follows Qualcomm's recent quarterly forecast, which projected revenue and profit below Wall Street estimates. The company attributed the shortfall to a global memory chip shortage that is constraining handset production and weighing on smartphone sales, particularly in China.
Broader Industry Impact
The supply constraints have affected other semiconductor companies with significant smartphone exposure, including Arm. Industry observers are questioning how long Android manufacturers can maintain production schedules as memory suppliers prioritize data-center customers. Some reports suggest the shortage could persist into 2027.
Separately, regulatory filings revealed an indirect sale of 3,200 Qualcomm shares at $137 by a family trust associated with an executive vice president. The transaction was executed under a Rule 10b5-1 plan, which allows corporate insiders to schedule predetermined stock sales.
Market participants are now monitoring whether memory availability will improve sufficiently to prevent deeper production cuts in mid-range Android devices, or whether elevated component costs will continue to prompt handset makers to reduce orders. The upcoming Mobile World Congress in Barcelona, scheduled for March 2-5, may provide fresh signals about smartphone supply chain conditions and manufacturer sentiment.
