QUALCOMM's (QCOM) weak fiscal Q2 outlook signals that memory tightness is impacting its smartphone builds, which may affect top-line growth, RBC Capital Markets said in a Wednesday note.

The company's Q2 earnings per share guidance of $2.55 on revenue of $10.6 billion, both at the midpoint, is below RBC's estimate of $2.95 per share on revenue of $11.2 billion, according to the note.

RBC said it sees not much immediate catalysts also reduced its fiscal 2026 EPS estimate to $11.24 from $12.14, and its fiscal 2027 EPS prediction to $11.04 from $12.42.

The company expects handset revenue to decline 13% year over year, impacted by memory constraints, reduced orders from Chinese original equipment manufacturers, and ongoing share shifts in iPhones and Samsung's Galaxy S26 smartphones, the note said.

RBC reiterated its sector perform rating on the stock and lowered its price target to $150 from $180.

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