Qualcomm (QCOM, Financial) shares sank more than 8% on Thursday morning after the chipmaker issued a tepid revenue forecast for the current quarter, offsetting better-than-expected fiscal second-quarter performance.
Revenue from handset chips, the company's core business, rose 12% year over year to $6.93 billion in the March quarter. While automotive and Internet of Things (IoT) units posted solid gains, investors appeared rattled by Qualcomm's guidance and potential share loss in upcoming Apple (AAPL, Financial) iPhone models.
Morgan Stanley's Joseph Moore, who holds an Equal-Weight rating on the stock, said the pullback came as a “surprise,” pointing to strength in handsets and auto segments. However, Moore noted Qualcomm's share in Apple's next iPhone could slip to 70%, down from his earlier estimate of 78%.
Wells Fargo's Aaron Rakers maintained an Underweight stance, trimming his price target to $140 from $175. Heflagged concerns over the company's exposure to China, risks tied to losing Apple's modem business, and ongoing tariff uncertainty.
