Driven by investor bets on the prospects of AI edge computing devices, automotive chips, and data center business, Qualcomm's stock price has reached a historic high, with its core position in the "physical AI" wave being repriced by Wall Street. On Friday, Qualcomm's stock soared 12% in a single day, setting a new record, with a cumulative gain of 75% over the past month. The company announced a chip supply agreement with automotive group Stellantis the previous day, while reports indicated Qualcomm is collaborating with OpenAI to develop AI chips for powering terminal devices operated by AI agents.
Ivan Feinseth, an analyst at Tigress Financial Partners, maintained a buy rating on Qualcomm, stating that investors are "waking up" to the realization that Qualcomm will return to its former glory and lead the connected device revolution. He expressed optimism about Qualcomm's upcoming device in collaboration with OpenAI, describing it as "a phone with an AI-based operating system capable of handling all tasks."
**From Smartphones to the Internet of Everything: Qualcomm Strengthens Its Core Position in Edge AI**
Although Qualcomm lags behind giants like NVIDIA in providing computing power for AI models and cloud workloads, the company is leveraging its long-standing dominance in the smartphone sector to extend its reach into various connected devices such as glasses, cars, and robots, building a core ecosystem for "edge AI." Qualcomm chips are already embedded in Microsoft's Surface series PCs, as well as smart glasses products from Google and Meta. Its Arm-based processors are known for their energy efficiency, offering a differentiated competitive advantage compared to traditional central processing units from Intel and AMD, aligning with the low-power computing needs of edge devices.
**Automotive Business Accelerates with Stellantis Partnership**
Qualcomm continues to deepen its presence in the automotive sector. On Thursday, Stellantis announced it would adopt Qualcomm's Snapdragon processors to provide a unified computing platform for its vehicle models, covering the cockpit, in-car connectivity, and advanced driver-assistance systems. Stellantis boasts a diverse brand portfolio, including Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, and Maserati. Ned Curic, Head of Product Development at Stellantis, stated during an investor day on Thursday that customers will be able to enjoy "smooth, immersive, and safe autonomous driving experiences on city and highway roads, with multiple driving modes available." This agreement is not an isolated case. Qualcomm has previously signed similar partnerships with Bosch, Volkswagen, Hyundai, and BMW. In its latest earnings report, Qualcomm's automotive business revenue grew 38% year-over-year to $1.3 billion, with over 1 million vehicles already running their autonomous driving systems on Qualcomm processors.
**Data Center Chip Breakthrough: New Business Opens Up Possibilities**
Friday's significant stock price jump also reflects investors' high expectations for Qualcomm's entry into the new business of data center chips. Last year, Qualcomm announced the launch of its AI200 and AI250 custom AI accelerator chips. Compared to NVIDIA's GPUs, these chips offer greater programmability and flexibility. They are scheduled to go on sale later this year and will be delivered as complete rack systems, similar to NVIDIA's Vera Rubin and AMD's upcoming Helios systems. Qualcomm CEO Cristiano Amon stated during an earnings call in April that the company would begin shipping data center chips to "a major hyperscale cloud service provider" within the year. The market expects Amon to deliver a keynote speech at the Computex event in Taiwan, China, on June 2, where further developments may be disclosed. Qualcomm's investor day is also scheduled for June 24.
Comments