Qualcomm stock falls after downgrade. The Apple supplier has an iPhone problem.
Qualcomm shares have had a strong start to the year but a decline in spending from longtime customer Apple could knock the chip maker off course, according to analysts at Mizuho Securities.
The firm downgraded Qualcomm stock to Neutral from Outperform and lowered its price target to $175 from $200 in a research note Friday. A weak smartphone market, plus Apple manufacturing more components in-house, could weigh on the company over the next few years, Mizuho argued.
Qualcomm didn’t respond to Barron’s requests for comment.
Shares were down 1.4% to $179.39 on Friday. The stock had gained 6.3% this year through Thursday, getting a boost after peer Microchip Technology lifted sales guidance for its latest quarter.
Mizuho sees total Apple smartphone sales declining by around 8% in 2026 as consumers grow more price-sensitive. A new foldable iPhone, which could sell at two or three times current prices, may hit the market in the second half of the year, delaying customers’ typical phone refresh cycle.
That’s bad news for Qualcomm—but it gets worse. The chip maker produces modem systems for iPhones, and Apple is now producing its own modems, with more advanced systems potentially on the way.
“For QCOM, we believe the lower exposure to market leader Apple remains a key headwind for 2026E and beyond,” wrote the analyst team led by Vijay Rakesh.
Mizuho estimated that Apple accounted for $8.8 billion worth of business for Qualcomm in fiscal 2025, and the loss of modem share could put roughly $3 billion at risk.
Analysts have flagged similar concerns as far back as 2024. As Barron’s wrote last November, the company has been priming investors for the loss of Apple’s sales for years, and it may already be factored into the stock price.
This time, the potential share loss comes while the overall smartphone market looks sluggish. Mizuho expects the market for global handsets at between flat and down 2% in 2026 after rising about 2% annually in 2025. The rising cost of memory chips is one culprit. A possible shift to lower-end handsets may be another.
Mizuho lowered its earnings estimates for Qualcomm by 3.7% in fiscal 2026 and 7% in 2027. The firm is now bearish by Wall Street’s standards, with its new $175 price target lagging more than 10% behind consensus.
Skyworks Solutions, another semiconductor company with significant exposure to the smartphone market, fell 0.4% to $60.43 on Friday. Mizuho reiterated a Neutral rating for the stock but cut its price target to $65 from $73.
Write to Nate Wolf at nate.wolf@barrons.com
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