Qualcomm’s stock falls on revenue miss and weak guidance; Arm and GlobalFoundries do little better

Chipmakers Qualcomm, Arm Holdings, and GlobalFoundries reported financial results that fell short of investor expectations, leading to declines in their respective stocks. Qualcomm saw its stock drop over 6% in after-hours trading after posting fourth-quarter earnings before certain costs of $2.17 per share on revenue of $10.44 billion, up just 8% from the previous year.

The results were disappointing as Wall Street was expecting earnings of $2.16 per share on $10.48 billion in sales. For the current quarter, Qualcomm is aiming for $2.25 per share in earnings and $10.48 billion in sales, falling short of the Street's target of $2.27 per share and $10.48 billion in revenue. The company's struggles stem from limited exposure to the AI industry's growth, with most of its sales coming from system-on-chips and modems for smartphones.

Qualcomm has attempted to adapt by raising chip prices, but smartphone sales fell 26% to $5.14 billion, below the Street's forecast of $5.21 billion. Arm and GlobalFoundries fared better, but their results still left investors wanting more. Arm reported adjusted earnings of 52 cents per share, beating the Street's target of 48 cents, while revenue grew 27% to $1.44 billion, surpassing the $1.38 billion estimate.

The company is focusing on data center chip designs to boost growth, but its guidance for the current quarter was cautious, with expectations for earnings of 56 cents per share and revenue of $1.54 billion. GlobalFoundries, a contract manufacturer specializing in building processors designed by semiconductor firms, reported adjusted earnings of $0.53 per share on $1.9 billion in sales, up 12% from the year before.

Analysts had expected $0.51 per share and $1.89 billion in revenue. Like Qualcomm, GlobalFoundries also faces challenges as a major customer of Arm.