Morgan Stanley has resumed coverage of Qualcomm with an underweight rating, citing significant challenges ahead for the chipmaker. Analyst Joseph Moore warned that earnings power is already optimized and that memory shortages are likely to create a tough Android environment in the second half of 2026. The bank noted that handset volumes appear pressured by severe memory constraints.

Qualcomm already faces multiple headwinds, including weaker smartphone demand, ongoing share loss at Apple, and potential further pressure within the Android ecosystem. Some China-based Android customers have recently delayed shipments due to limited memory availability, and Morgan Stanley cautioned that Qualcomm's forecast for only a single-digit decline in handset volumes may prove optimistic. The firm highlighted that automotive has been an unequivocal success but still represents only 9% of revenue.

The bank set a price target of $132 for Qualcomm stock, describing it as inexpensive but likely to modestly underperform unless data-center optionality strengthens. While diversification efforts continue, with automotive showing promise, the Snapdragon Elite PC platform faces long-standing compatibility issues. Morgan Stanley also noted that Qualcomm's AI ambitions will require substantial investment with uncertain payoff, adding to the company's challenges in the coming year.