Qualcomm shares tumbled 5.90% in pre-market trading on Thursday, extending the previous session's after-hours losses, as the semiconductor giant's fiscal third-quarter earnings miss and a significantly weaker-than-expected profit outlook for the current quarter triggered a broad sell-off. The stock came under heavy pressure after the company reported results that highlighted mounting cost headwinds and an accelerating loss of business from key customer Apple.

For the fiscal third quarter ended June 28, Qualcomm posted adjusted earnings of $2.21 per share, narrowly missing the analyst consensus of $2.23, while net profit plunged 25% year-over-year to $2.0 billion. Revenue fell 4% to $9.95 billion, slightly above estimates, but the bottom-line miss and cautious commentary overshadowed the top-line beat. More critically, the company issued fourth-quarter adjusted EPS guidance of $2.05 to $2.25, well short of the $2.36 analysts had forecast, and projected revenue between $9.7 billion and $10.5 billion. CEO Cristiano Amon cited an unprecedented surge in memory chip prices and broad-based supply chain cost increases as the primary culprits, noting that memory costs soared approximately 300% year-over-year this quarter. The handset business bore the brunt of the impact, with revenue in the segment dropping 20% year-over-year to $5.1 billion, as elevated component costs dampened smartphone demand and pushed consumers toward lower-priced models or older-generation devices.

Adding to investor anxiety, Qualcomm warned that revenue from Apple products will decline at an accelerated pace starting in the fourth fiscal quarter, with the company's modem share in the upcoming iPhone launch expected to fall substantially below the prior estimate of 20%. Management attributed this partly to supply constraints and partly to Apple's ongoing transition to in-house chips. To combat the margin compression, Qualcomm announced double-digit price increases across its chip portfolio effective September 1, a move the company expects will gradually restore gross margins to historical levels. The cautious outlook prompted swift reactions from Wall Street, with TD Cowen slashing its price target to $175 from $225, Morgan Stanley cutting to $220 from $231, and Bernstein lowering its target to $165 from $235. Goldman Sachs also said it expects the stock to trade lower following the weak margin guidance. While Qualcomm highlighted bright spots including a record 61% surge in automotive chip revenue and a newly expanded decade-long chip supply agreement with BMW, the near-term headwinds from memory cost inflation, handset weakness, and Apple revenue erosion dominated market sentiment in pre-market trading.