"Even if Qualcomm weren't to catch up to the top two leaders in the AI accelerator scene, I view its latest pivot as a massive win, especially when you consider there's still likely ample economic profits to be had by AI chip makers outside of the top two. Add the circular deals we've witnessed in the AI scene, and I do view the latest development in Qualcomm as a big one that warrants the excitement surrounding QCOM stock's double-digit percentage move."
"Undoubtedly, if there's a firm that can execute as it enters the AI chip race, it's Qualcomm, a firm that I pounded the table on in a previous piece, citing it as a "lesser-appreciated" semiconductor company whose "AI chip efforts should help fuel a comeback in shares" well before a 6G connectivity boom (likely in a few years down the road) had a chance to work its way into the bottom line."
Shares of Qualcomm jumped over 11% in a single session after news that the company will enter the AI chip race, positioning it against AMD and Nvidia. The company’s pivot could capture meaningful profits even if it does not displace the top two leaders, because AI accelerator economics allow opportunities beyond the market leaders. Circular commercial arrangements in the AI ecosystem increase deal velocity and revenue potential. Qualcomm has operational strength and previous investments in AI-related chips and 6G connectivity that support execution risk. Analysts are likely to reassess price targets, given a trailing P/E below 20 and upside potential if Qualcomm's chips gain traction.
Read at 24/7 Wall St.
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