Qualcomm Stock Rises 3.3% as Data Center Ambitions Overshadow Smartphone Concerns

Qualcomm shares are rising again as investors pay more attention to the company’s future than its past. The stock went up 3.3% in premarket trading on Tuesday, adding to a 68% rally over the last three months. Markets are setting aside worries about weak smartphone sales and competition from Nvidia in PC chips, and are instead focusing on Qualcomm’s plans for data centers. Here’s what is driving the stock and what to watch for at the June 24 investor day.

J.P. Morgan expects Qualcomm to set data center revenue targets of over $3 billion for fiscal year 2027 at its investor day, with the potential to reach $35 billion by 2031. The firm put Qualcomm shares on its Positive Catalyst Watch before the event, predicting that the new targets will be higher than what investors currently expect. However, it is keeping a Neutral rating until there is proof that Qualcomm can deliver in what is becoming a more competitive market. Investors are also waiting to find out who the major customer is for Qualcomm’s custom data center chip.

A possible acquisition is also in the spotlight. According to The Information, Qualcomm is in talks to buy the private AI chip startup Tenstorrent for about $8 billion to $10 billion, based on information from a source familiar with the matter. Both Qualcomm and Tenstorrent have not responded to requests for comment. Tenstorrent makes flexible AI chips and the software that runs them, but the biggest draw for Qualcomm could be bringing in Tenstorrent’s CEO, Jim Keller, who has an impressive history in chip design at companies like Advanced Micro Devices, Apple, and Tesla.

With a big investor day coming up, the possibility of a major acquisition, and analysts predicting that data center revenue could reach tens of billions of dollars in five years, investors are starting to look beyond Qualcomm’s traditional smartphone and PC chip businesses.