Mizuho no longer believes in Qualcomm because of declining orders from Apple. The stock is down

Analysts at Mizuho Securities no longer recommend buying shares of chipmaker Qualcomm due to a decline in supplies to one of its main customers, Apple. The iPhone maker is gradually switching to its own modems and other components, which the company previously bought from Qualcomm. This could put pressure on Qualcomm's business in the coming years, Mizuho explained. Shares of the chipmaker were down almost 4% in trading on Friday, January 9.

Analysts at Mizuho Securities, led by Vijay Rakesh, downgraded their recommendation on Qualcomm shares from "buy" to neutral and lowered the target price of the company's securities from $200 to $175, Barron's reports. This is more than 10% below the Wall Street consensus forecast, which makes Mizuho's target price one of the most pessimistic, the publication emphasizes.

Analysts warn that despite a strong start to the year, Qualcomm's securities may veer off course due to lower purchases from longtime customer Apple. The reason was the weak smartphone market and Apple's ramping up of component production in-house, which could put pressure on Qualcomm's business in the coming years.

In trading on Friday, January 9, the company's shares were down 3.9% to $174.8 at the moment. Since the beginning of the year, the securities have added 6.3%, which was facilitated by an optimistic revision of the sales forecast of Qualcomm's competitor Microchip Technology, Barron's notes.

Mizuho expects Apple's total smartphone sales to decline by about 8% in 2026 on the back of consumers' growing price sensitivity. The possible release of a foldable iPhone in the second half of 2026 - with a price 2-3 times higher than the current one - could shift the usual cycle of device upgrades among buyers. That's bad news for Qualcomm, but there's a more troubling signal, Barron's writes. The company supplies modem systems for the iPhone, but Apple already makes its own modems, and may be working on more advanced solutions.

Bloomberg, citing its sources, reported that Apple plans to replace Broadcom controllers in its Bluetooth and Wi-Fi devices with its own development - a chip code-named Proxima, which has been under development for several years, as early as the end of 2024. At that time, the sale of these components provided the semiconductor company with about 20% of revenue.

"We believe that reducing Qualcomm's dependence on market leader Apple remains a key headwind [for the company] for 2026 and beyond," a team of analysts led by Vijay Rakesh wrote in a note quoted by the publication.

Mizuho estimated Apple's orders from Qualcomm at $8.8 billion in fiscal 2025, and losing share in the modem segment could jeopardize about $3 billion, so the investment bank lowered Qualcomm's earnings forecast by 3.7% in 2026 and 7% in 2027.

According to MarketWatch, of the 37 analysts tracking Qualcomm securities, 18 of them advise to buy (Buy and Overweight), the same number take a neutral position (Hold), and only one advises to sell (Sell). The Wall Street consensus price target is $192.8, up 6% from the closing price on Thursday, January 8th.

This article was AI-translated and verified by a human editor