QCOM Stock Climbs To 2-Month High As AI Data Center Push Gains Momentum

Qualcomm’s diversification beyond smartphones is gaining traction as investors assess its potential role in hyperscaler AI infrastructure.

• Amazon’s multiyear AI-chip deal gives Qualcomm a major hyperscaler customer and a new growth avenue.
• StoneX maintained its Buy rating and $270 price target, citing improving data-center leverage.
• Weak handset demand and rising costs continue to weigh on Qualcomm’s core business.

Qualcomm, Inc.’s shares climbed 4.3% on Tuesday to hit a two-month high before paring some gains slightly in overnight trading, as investors increasingly warmed to the chipmaker’s push into AI data-center infrastructure. 

The move comes as Qualcomm, which has lagged much of the semiconductor sector during the AI-driven rally, begins to attract renewed attention for its potential role in custom AI silicon.

Tuesday’s rally came as StoneX reiterated its ‘Buy’ rating and $270 price target for Qualcomm. The research firm pointed to encouraging leverage in the company’s data-center business, while acknowledging that demand across Qualcomm’s broader portfolio remains uneven.  

Last week, Qualcomm announced a multigenerational collaboration with Amazon to develop customized AI chips for AWS, a deal that delighted analysts tracking the legacy chipmaker.

Under the long-term arrangement, Amazon could purchase up to $60 billion of Qualcomm’s AI data-center chips and related products, marking a big win for the chipmaker.

The partnership matters because Qualcomm has historically been viewed primarily as a smartphone-chip company. The company is now targeting AI inference workloads, where its emphasis on power-efficient processing could provide a foothold in data centers. 

Qualcomm is also developing high-speed optical connectivity with Amazon, extending its opportunity beyond compute chips.  

Why Does Qualcomm Trail Chip Peers?

Qualcomm has traditionally trailed chip peers because its business has been heavily tied to smartphones, a market with slower growth and more cyclical demand than AI data centers. 

Investors have also viewed the company’s exposure to Apple as an overhang, given Apple’s long-running effort to develop its own modem technology, while Qualcomm has had relatively limited exposure to the hyperscaler AI infrastructure boom that has driven Nvidia, Broadcom, and other chip stocks higher.

Qualcomm's core handset business has also faced uneven demand in recent years for various reasons. The Amazon deal changes that narrative by giving Qualcomm a marquee hyperscaler relationship and a clearer path to diversify beyond smartphones.

The contract win comes at a crucial time. Qualcomm’s third-quarter profit fell to $2 billion from $2.67 billion a year earlier, as a 20% drop in handset sales, higher input costs and supply-chain pressures weighed on results. 

Revenue declined 4% to $9.95 billion, and the company issued a weaker-than-expected fourth-quarter profit outlook.

Retail, Analyst View On QCOM

On Stocktwits, retail sentiment for QCOM dipped this week to ‘bearish’ as of late Tuesday.

“$QCOM A lot of catalysts for this stock. Holding good amid the sector weakness. Can reach $200 by Friday,” a trader said.

Another wrote: “$QCOM is escaping some of that selling because its story has changed from: "smartphone semiconductor company" to: "smartphone + automotive + edge AI + potentially huge Amazon data-center business."

Currently, 23 out of 37 analysts recommend ‘Hold’ on QCOM shares, 11 recommend ‘Buy’ or higher, and three rate it ‘Sell’ or lower, per Koyfin. Their average price target of $194.13 implies 3.4% upside from the stock’s last close.

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