Qualcomm Down 24%, Launches $20B Buyback as Arm Enters AI Chips
Qualcomm shares have fallen 24% in 2026 as memory shortages and concerns over its Apple partnership weigh on growth, and rival Arm is moving into in-house AI server chip production. The company unveiled a $20 billion share buyback and dividend increase, supported by strong cash flow.
1. Stock Performance and Headwinds
Qualcomm shares have declined 24% year-to-date, driven by global memory shortages that disrupt chip component availability and broader semiconductor sector pressure. Investors are scrutinizing the impact of supply chain constraints on near-term revenue and margin forecasts.
2. Capital Return Plan
The company announced a $20 billion share repurchase program and a dividend increase, leveraging robust free cash flow to underwrite the capital return strategy. Management emphasized that balance sheet strength will allow continued investment in R&D alongside shareholder distributions.
3. Competitive Pressure from ARM
Arm’s move into manufacturing with its AGI CPU for AI data centers marks a departure from its pure licensing model and could encroach on Qualcomm’s royalty revenue. By partnering with Meta and OpenAI, Arm aims to capture higher-margin chip sales, posing a new competitor in the AI hardware market.
4. Apple Partnership Risk
Qualcomm faces significant exposure to its modem business with Apple, and any shift toward in-house designs could materially reduce revenue. The company is advancing next-generation 5G modem development and engaging in ongoing negotiations to preserve its supply relationship.