Qualcomm stock surges 15% as AI chips and data center expansion fuel investor confidence

Qualcomm Stock Hits 52-Week High on AI Momentum

Qualcomm stock jumped nearly 15% on Thursday morning, reaching a fresh 52-week high of $209.23 as investor confidence surged around the company's aggressive strategic pivot into AI 1

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. The rally pushed trading volume to 17.9 million shares, more than double the normal 20-day average of 8.5 million shares for that time of day 1

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. Later in the session, the stock cooled slightly but remained up around 9%, reflecting sustained enthusiasm for the chipmaker's transformation beyond smartphones 1

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AI Data Center Chips Drive Strategic Transformation

The latest surge follows CEO Cristiano Amon's announcement that Qualcomm expects to begin shipping AI data center chips to a major hyperscaler customer within the year, significantly earlier than the previously planned fiscal 2027 timeline 1

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. This accelerated data center expansion marks a critical milestone in Qualcomm's evolution into an AI computing company. The company's AI roadmap now extends across CPUs, inference accelerators, and custom ASICs following its $2.3 billion acquisition of Alphawave 1

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. Reports also emerged about Qualcomm partnering with OpenAI to develop an AI-native smartphone chip, with mass production potentially beginning in 2028, signaling a completely new generation of AI-powered phones 1

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Strong Earnings and New Snapdragon AI Chips Boost Confidence

Qualcomm recently reported strong second-quarter earnings that beat Wall Street expectations, posting adjusted earnings per share of $2.65 versus analyst expectations of $2.56, and revenue of $10.60 billion compared to expected $10.59 billion 1

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. The company announced two new mobile AI chips—Snapdragon 6 Gen 5 and Snapdragon 4 Gen 5—to strengthen its smartphone business with AI-powered features 1

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. The Snapdragon 6 Gen 5 platform delivers 20% faster app launches, 18% less screen stutter, and 21% better GPU performance, while supporting both 5G connectivity and Wi-Fi 7 1

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. The Snapdragon 4 Gen 5 chip brings 77% better GPU performance and supports 90FPS gaming for the first time in the Snapdragon 4-series, with commercial devices from Honor, OPPO, realme, and REDMI expected to launch in the second half of 2026 1

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Automotive Tech and Shareholder Returns Signal Diversification

Cristiano Amon highlighted that Qualcomm's automotive tech business crossed $5 billion in annualized revenue for the first time, with expectations to reach a $6 billion run rate by the end of fiscal 2026 1

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. This diversification beyond smartphones into automotive tech and AI infrastructure positions Qualcomm as a broad-based technology provider. The company also announced a new $20 billion stock buyback program after completing $5.4 billion in buybacks during the first half of fiscal 2026, and increased its quarterly dividend from $0.89 to $0.92 per share 1

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. These shareholder returns underscore management's confidence in sustained growth.

Analyst Ratings Improve as Markets Reassess Valuation

Argus Research raised Qualcomm's price target from $180 to $220 while maintaining a Buy rating, noting that the company's expansion into automotive tech and AI deserves a higher valuation 1

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. Other analyst ratings include JP Morgan maintaining Neutral with a price target raised to $160, UBS Neutral at $170, and TD Cowen Buy at $200 2

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. The average analyst price target stands at $161.89 based on 35 analysts, though recent moves suggest growing recognition of Qualcomm's AI potential 2

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. Institutional investors have also increased their positions, with Gateway Investment Advisers LLC raising its Qualcomm holdings by 2.4% during the fourth quarter 1

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. The temporary 90-day tariff pause between the US and China also helped reduce concerns about smartphone demand in China, Qualcomm's biggest smartphone chip market 1

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. Qualcomm's licensing business model, built on patents tied to CDMA and OFDMA standards underpinning 3G, 4G, and 5G networks, provides a stable revenue foundation as the company expands into new AI-adjacent compute markets 2

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. Investors now view Qualcomm not just as a smartphone chip vendor but as a diversified AI computing company positioned across smartphones, automotive tech, AI infrastructure, and data centers, with the June investor day expected to provide more details on the hyperscaler partnership and long-term AI strategy 1

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