Qualcomm (QCOM) shares spiked more than 15% on Monday, extending the stock’s rebound to 45% from its early April low, as investors piled into multiple bullish narratives surrounding the chipmaker. Trading volume hit 41.6 million shares, roughly 242% above the company’s three‑month average of 12.1 million shares, signaling strong conviction behind the move.
The rally stood out against a largely flat broader market. The S&P 500 rose just 0.12% and the Nasdaq Composite added 0.20%. Meanwhile, peers Texas Instruments and Broadcom fell 2.77% and 1.08% respectively, underscoring the idiosyncratic nature of Qualcomm’s jump.
Two distinct catalysts drove the action.
First, reports emerged that Qualcomm is working with OpenAI on AI‑focused smartphone processors. The potential collaboration reignited investor interest in on‑device AI — running advanced language models directly on mobile devices rather than in the cloud. For Qualcomm, whose chipsets are central to the smartphone upgrade cycle, a shift of AI workloads from cloud to device could be a significant long‑term opportunity. Still, any commercial benefit is likely to materialize over future product cycles, not in the immediate quarter.
Second, and perhaps more consequential for the near‑term narrative, CEO Cristiano Amon confirmed during the company’s fiscal second‑quarter earnings call that Qualcomm is entering the custom silicon space. “We are also entering the custom silicon space, beginning our ramp with a leading hyperscaler and we expect initial shipments in December,” Amon said. While Qualcomm has been developing data center processors for nearly a year, this marks its first real revenue from the segment — a clear signal that the company is expanding beyond mobile handsets.
The earnings results themselves were a mixed bag. For the March quarter, Qualcomm posted revenue of $10.6 billion and earnings per share of $2.65. Both topped analyst expectations of $10.56 billion and $2.55, respectively, even as they declined 2% and 7% year over year. Handsets remained the dominant revenue driver.
But the outlook for the current quarter fell short. Qualcomm guided for revenue between $9.2 billion and $10.0 billion, below the $10.23 billion consensus. Its EPS guidance of $2.10 to $2.30 put the analyst estimate of 2.3 at the very top end. Typically, such a cautious forecast would weigh on shares, but the data center announcement and OpenAI chatter more than offset the weak guidance.
Following the report and conference call, several analysts who had been lukewarm on the stock raised their price targets. Yet most of the new targets still hover near or below Qualcomm’s current price of around $178, suggesting that the recent rally may have already priced in much of the near‑term optimism.
With a 45% rebound from its April low, the stock has also built up considerable profit‑taking potential. A short‑term pullback or period of consolidation would not be surprising. That said, the longer‑term debate now centers on whether Qualcomm can successfully establish itself as a serious player in data center chips — and how quickly its on‑device AI opportunity translates into revenue. For now, the market appears willing to give the company the benefit of the doubt.
