QUALCOMM Incorporated

(NASDAQ Global Select)
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Very Bullish +85

Qualcomm stock jumps 15% as AI partnership with OpenAI, new Snapdragon chips and strong earnings boost investor confidence

AI-generated analysis

📈 Qualcomm stock jumped nearly 15% on Thursday morning, cooling slightly later but still trading around 9% higher for the day.

🤝 Investors cheered reports of a new partnership with OpenAI to develop an AI-focused smartphone chip.

🤖 The reported AI-native chip from the OpenAI collaboration could begin mass production as early as 2028.

💰 Qualcomm reached a fresh 52-week high of $209.23 during morning trading sessions.

🚗 CEO Cristiano Amon announced that automotive business revenue crossed $5 billion in annualized terms for the first time.

📊 The company expects automotive revenue to reach a $6 billion run rate by the end of fiscal 2026.

🏆 Qualcomm reported adjusted earnings per share of $2.65, surpassing analyst expectations of $2.56.

💵 Quarterly revenue came in at $10.60 billion, slightly exceeding Wall Street estimates of $10.59 billion.

📱 Two new mobile chip platforms, Snapdragon 6 Gen 5 and 4 Gen 5, were announced to strengthen the smartphone business.

⚡ The Snapdragon 6 Gen 5 platform offers 20% faster app launches, 18% less screen stutter, and improved GPU performance.

🎮 The new Snapdragon 4 Gen 5 chip brings 77% better GPU performance compared to earlier versions.

📅 Commercial devices utilizing the new chip platforms are expected to launch in the second half of 2026.

🔄 Qualcomm completed its $2.3 billion acquisition of Alphawave to expand its data center business.

📉 The company announced a new $20 billion stock buyback program and increased its quarterly dividend from $0.89 to $0.92 per share.

👏 Argus Research raised its price target for Qualcomm from $180 to $220 while maintaining a "Buy" rating.

🇨🇳 A temporary 90-day tariff pause between the US and China reduced investor worries about weak smartphone demand in that market.

📉 Institutional investors increased holdings, with Gateway Investment Advisers LLC raising its position by 2.4% in the fourth quarter.

🤖 Markets now view Qualcomm as a diversified AI computing company rather than just a smartphone chip manufacturer.

📅 Qualcomm's next major milestone is expected to be discussed at its June 24 Investor Day event regarding data center AI.

🌐 The broader NASDAQ rose 0.48% and the S&P 500 gained 0.13% during Thursday’s trading session.

Bullish Signals
  • Qualcomm stock jumped nearly 15% on Thursday, reaching a fresh 52-week high of $209.23, as investors celebrated the company's growing role in the AI market.
  • Reports indicate a strategic partnership between Qualcomm and OpenAI to develop an AI-focused smartphone chip with mass production expected to begin by 2028.
  • CEO Cristiano Amon announced that the automotive business crossed $5 billion in annualized revenue, with expectations to reach a $6 billion run rate by the end of fiscal 2026.
  • Qualcomm posted strong second-quarter earnings with adjusted EPS of $2.65, beating analyst expectations of $2.56, and revenue of $10.60 billion, slightly above the expected $10.59 billion.
  • The company announced two new chip platforms, Snapdragon 6 Gen 5 and Snapdragon 4 Gen 5, featuring significant performance improvements such as 20% faster app launches for the 6-series and 77% better GPU performance for the 4-series.
  • Qualcomm completed its $2.3 billion acquisition of Alphawave to expand its data center business and announced an additional $20 billion stock buyback program.
  • The quarterly dividend was increased from $0.89 to $0.92 per share, providing enhanced returns to shareholders.
  • Analyst Argus Research raised its price target from $180 to $220 while maintaining a 'Buy' rating, citing expansion into automotive technology and AI as key drivers for higher valuation.
  • Commercial devices using the new Snapdragon platforms are scheduled to launch in the second half of 2026 with major smartphone brands like Honor, OPPO, realme, and REDMI expected to utilize them.
Risk Factors
  • Mass production of the rumored OpenAI partnership AI chip is not expected until 2028, potentially leaving a multi-year gap without significant new revenue streams.
  • Qualcomm recently lowered its expected timeline for data center chip shipments to later this year from fiscal 2027, indicating slower-than-anticipated growth in its high-growth segment.
  • The company relies heavily on the US-China tariff pause to mitigate demand concerns in China, which remains its biggest smartphone chip market, suggesting continued regulatory fragility.
  • Qualcomm is facing competition from emerging AI competitors and hyperscalers who may not wait for the 2028 timeline to develop their own proprietary solutions.
  • The upcoming June 24 Investor Day will be a critical test, and any miss in details regarding the data center AI business could lead to significant investor disappointment.
  • Despite acquiring Alphawave, Qualcomm still has a large remaining backlog from its recent $2.3 billion acquisition that must be integrated effectively.
  • Institutional investors increased holdings, but this may simply reflect current market optimism rather than long-term certainty in Qualcomm's diversification strategy.
Full Analysis
Qualcomm stock surged approximately 15% on Thursday, reaching a fresh 52-week high near $209.23, driven by robust earnings beats and significant strategic developments in the artificial intelligence sector. The company reported adjusted earnings per share of $2.65, surpassing Wall Street expectations of $2.56, while quarterly revenue came in at $10.60 billion against an estimate of $10.59 billion. Management highlighted that its automotive business has crossed $5 billion in annualized revenue, with expectations to reach a $6 billion run rate by the end of fiscal 2026, signaling successful diversification beyond its traditional smartphone dominance. A major catalyst for the rally was a reported partnership between Qualcomm and OpenAI to co-develop an AI-focused smartphone chip, with mass production potentially beginning in 2028. Additionally, the company announced the launch of two new mobile platforms: the Snapdragon 6 Gen 5 and Snapdragon 4 Gen 5, targeted at Honor, OPPO, realme, and REDMI brands for release in the second half of 2026. These chips offer substantial performance improvements, including faster app launches, reduced screen stutter, enhanced GPU capabilities, and advanced connectivity features like Wi-Fi 7 and Dual SIM Dual Active 5G. Investors also welcomed the completion of Qualcomm's $2.3 billion acquisition of Alphawave to bolster its data center portfolio and the announcement of a massive $20 billion stock buyback program alongside an increase in the quarterly dividend from $0.89 to $0.92 per share. Analysts responded positively, with Argus Research raising its price target from $180 to $220 on a Buy rating, citing the company's growth potential in automotive and AI infrastructure. The stock rally was further supported by a temporary 90-day tariff pause between the US and China, alleviating concerns over smartphone demand in Qualcomm's largest market. Following these updates, institutional investors like Gateway Investment Advisers LLC increased their holdings, reinforcing confidence in Qualcomm's transformation into a diversified AI computing leader ahead of its upcoming June 24 Investor Day event.