Key Stats for $QCOM Stock
- Price Change for $QCOM stock: 11%
- Current Share Price as of Oct. 27: $188
- 52-Week High: $206
- $QCOM Stock Price Target: $180
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What Happened?
Qualcomm (QCOM) stock jumped over 11% on Monday after it announced plans to enter the AI data center chip market.
The move marks a significant shift for Qualcomm, which has traditionally focused on mobile and wireless connectivity chips rather than the massive computing systems used in AI data centers.
Qualcomm revealed two new AI accelerator chips that will come to market. The AI200 will ship in 2026, and the AI250 is planned for 2027.
Both chips can be installed in full server racks that use liquid cooling, putting Qualcomm stock in direct competition with Nvidia and AMD in the fastest-growing segment of the tech industry.
McKinsey estimates that nearly $6.7 trillion will be spent on data centers through 2030, with most of that money going toward AI chip systems.
Qualcomm is betting it can grab a meaningful piece of that market by offering chips that are more efficient and cost less to operate than existing options.
Companies like OpenAI have been looking for alternatives to Nvidia’s GPUs, which currently control over 90% of the AI chip market.
Earlier this month, OpenAI announced plans to buy chips from AMD and potentially take a stake in the company.
Notably, cloud giants like Google, Amazon, and Microsoft are also developing their own AI accelerators.
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What the Market Is Telling Us About Qualcomm Stock
The 11% surge in Qualcomm stock shows investors believe the company can compete in this space. The market seems to be pricing in the possibility that Qualcomm’s expertise in efficient chip design could translate well to data centers, especially since the company claims its systems will cost less to run than competing products.
Qualcomm is focusing on inference rather than training, meaning it runs AI models rather than building them from scratch. This approach could appeal to cloud service providers who need to serve billions of AI requests efficiently without burning through power and money.
The company’s new chips are based on the neural processing units already used in Qualcomm’s smartphone chips, which gives it a head start.
Qualcomm has spent years perfecting low-power AI processing for mobile devices and is currently scaling that technology up to data center levels.
Nvidia has a massive lead, deep relationships with AI labs, and a software ecosystem that developers love.
Qualcomm will need to prove its chips can handle real-world workloads and convince customers to take a chance on a new supplier.
Saudi Arabia’s Humain has committed to deploying Qualcomm’s AI chips across data centers that use up to 200 megawatts of power. This partnership gives Qualcomm a testing ground to prove its technology at scale.
For investors watching Qualcomm stock, the bigger story here is diversification.
- The company has been working hard to reduce its dependence on smartphone chips.
- Its automotive business is growing fast, with revenue expected to hit $8 billion by fiscal 2029.
- Industrial IoT is another growth area, with targets of $4 billion in revenue by the same timeframe.
Adding data center AI chips to the mix gives Qualcomm stock another growth driver at a time when the smartphone market has matured. If it can capture even a small slice of the AI chip market, it could significantly boost revenue over the next few years.
The market’s reaction suggests investors are optimistic about Qualcomm’s chances. However, the company needs to ship competitive products on time, win over skeptical customers, and prove it can support data center clients with the same reliability it’s shown in mobile.
For now, Qualcomm stock is getting credit for making a bold move into one of tech’s hottest markets. Whether that optimism holds will depend on how well the company delivers over the next couple of years.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
