Qualcomm shares climbed sharply in morning trading, rising roughly 8.49% to $208.92 and briefly touching a new 52-week high of $209.23. Investors appear to be rewarding the chipmaker’s expanding focus beyond handset components and toward AI infrastructure and automotive compute.
The immediate spark for today’s gain was reporting on a planned partnership with OpenAI to build an AI-native smartphone chip, with mass production aimed for 2028. That report added to momentum that had already begun to build following the company’s most recent quarterly report.
On April 29 Qualcomm disclosed second-quarter adjusted earnings per share of $2.65 on revenue of $10.60 billion, figures that beat consensus estimates of $2.56 and $10.59 billion, respectively. In its quarterly update the company also disclosed that it had surpassed $5 billion in annualized automotive revenues for the first time.
Management noted the firm expects to exit fiscal 2026 at an automotive revenue run rate above $6 billion. In addition, Qualcomm said a leading hyperscaler custom silicon engagement is on track for initial shipments later this calendar year. Elsewhere in the narrative the company’s data center and Physical AI engagements with hyperscalers were described as set to ship later in 2026.
On the corporate finance front Qualcomm completed the $2.3 billion acquisition of Alphawave to bolster its data-center presence, authorized an additional $20.0 billion in share repurchases and raised its quarterly dividend from $0.89 to $0.92 per share. These actions signal an increased emphasis on returning capital to shareholders while expanding the company’s addressable markets.
Analyst sentiment contributed to the positive market response. Argus increased its price target on QCOM from $180 to $220 and maintained a Buy rating, pointing to the company’s progress in automotive and AI as justification for a higher valuation. On the institutional ownership side, Gateway Investment Advisers LLC increased its Qualcomm stake by 2.4% in the fourth quarter, according to its most recent 13F filing with the SEC.
Macro developments also helped remove a key headwind. A US-China 90-day tariff pause lifted a China handset inventory overhang that had pressured the stock after the earnings call. Company management had cited China handset trends as a factor in Q3 guidance, and the tariff pause directly addressed those concerns while helping stabilize the Android upgrade cycle in China - the largest market for Qualcomm’s QCT handset revenue.
The broader market provided a constructive backdrop, with the NASDAQ up 0.48% and the S&P 500 up 0.13% on the day following a prior session when global equities climbed to fresh records. Taken together, these elements appear to have increased market conviction that Qualcomm is transforming from a handset-centric supplier to a provider of diversified AI compute platforms.
Investors will have another scheduled milestone on June 24, when Qualcomm hosts its Investor Day and is expected to provide more quantified detail on the company’s data-center opportunity. With the stock now trading at a new 52-week high, the market seems to be pricing in early signs of a potential re-rating of Qualcomm’s long-term earnings power based on its expanding exposure to automotive, data center and AI-driven products.
Summary
Qualcomm’s stock spike was driven by reports of an OpenAI partnership to develop an AI-native smartphone chip targeted for mass production in 2028, along with momentum from stronger-than-expected Q2 results, growing automotive revenue, a completed Alphawave acquisition, expanded buyback authorization and a dividend increase. The US-China tariff pause and analyst upgrades also supported the move to a fresh 52-week high.
Key details in this report:
- Stock rose approximately 8.49% to $208.92, reaching a 52-week high of $209.23.
- Reported partnership with OpenAI to develop an AI-native smartphone chip with mass production targeted for 2028.
- Q2 adjusted EPS $2.65 on revenue $10.60 billion, beating estimates of $2.56 and $10.59 billion.
- Automotive annualized revenues exceeded $5 billion; company expects to exit fiscal 2026 above a $6 billion automotive run rate.
- Closed $2.3 billion Alphawave acquisition, authorized $20.0 billion more for buybacks, and raised quarterly dividend to $0.92 from $0.89.
What sectors are impacted
- Semiconductors - Qualcomm’s strategic shifts affect chip demand and supplier dynamics.
- Automotive - rising automotive revenue indicates growing compute content in vehicles.
- Technology / Data Centers - Alphawave deal and hyperscaler engagements signal increased activity in data-center silicon and AI infrastructure.
Risks and uncertainties
- Timing of new product rollouts - the OpenAI-linked AI-native smartphone chip is targeted for mass production in 2028, creating a multi-year timeline before potential revenue impact.
- Execution of hyperscaler engagements - the company referenced initial shipments later this calendar year and additional shipments described as set to ship later in 2026; actual delivery and adoption timelines could influence the revenue outlook.
- Macroeconomic and policy factors - the US-China 90-day tariff pause alleviated a China handset inventory issue, but changes to that environment or other policy shifts could reintroduce headwinds for handset-related revenue.