Qualcomm Inc.'s valuation is being reshaped by Wall Street, with shares jumping 12% Friday to a record high as investors bet on the chipmaker's expanding role in powering artificial intelligence in cars, PCs, and future data center hardware.
"Investors are 'awakening' to the fact that Qualcomm is poised to resume its former glory and lead the next connected device revolution," said Tigress Financial Partners analyst Ivan Feinseth, who maintained a buy rating on the stock. He expressed optimism for a potential device from a collaboration with OpenAI, describing it as "a phone based on an AI operating system that will do everything."
The immediate driver for Friday's surge was a multi-year agreement with Stellantis NV, which will use Qualcomm's Snapdragon Digital Chassis to power cockpit, connectivity, and advanced driver-assistance systems (ADAS) across its 14-brand portfolio, including Jeep, Dodge, and Maserati. The deal adds to Qualcomm's growing list of automotive partners, which includes Volkswagen, Hyundai, and BMW. The company's auto-related revenue grew 38% in the last quarter to $1.3 billion.
The recent developments signal a critical shift in perception for Qualcomm, long dominant in mobile phones but often valued as a slower-growth hardware supplier. The market is now pricing it as a key player in high-growth "edge AI," where processing happens on devices themselves, putting it in direct competition with heavyweights like Nvidia Corp. and Advanced Micro Devices Inc.
From Smartphones to Everything: Qualcomm's Edge AI Moat
While Nvidia dominates the market for training large AI models in the cloud, Qualcomm is leveraging its long-standing expertise in power-efficient, Arm-based processors to capture the expanding universe of AI-powered edge devices. Its chips are already found in Microsoft's latest Surface PCs and smart glasses from both Google and Meta Platforms.
This focus on performance-per-watt provides a key advantage over traditional x86 processors from Intel, meeting the critical demand for low-power computation in battery-operated devices. Reports of a partnership between MediaTek and OpenAI to develop an AI smartphone further highlight the industry-wide push toward on-device AI, a trend that plays directly to Qualcomm's strengths and could open up new branding opportunities, according to analyst Ming-Chi Kuo.
Data Center Ambitions Open New Front
Friday's stock surge also reflects investor anticipation for Qualcomm's entry into the data center market, a segment dominated by Nvidia. The company announced its AI200 and AI250 custom accelerator chips late last year, which offer greater programming flexibility than GPUs and are slated for release later this year.
Qualcomm CEO Cristiano Amon stated in an April earnings call that the company would begin shipping data center chips to a "large hyper-scale cloud service provider" within the year. More details are expected when Amon delivers a keynote address at the Computex conference in Taipei on June 2, with an investor day scheduled for June 24.
This article is for informational purposes only and does not constitute investment advice.
