Qualcomm (QCOM) shares rose approximately 3% in premarket trading to $228.09 on Tuesday, extending a rally that has lifted the stock roughly 68% over the past three months. Investor enthusiasm centers on the chipmaker's expanding push into artificial intelligence hardware and speculation about a major acquisition.
Tenstorrent Deal Talks Surface
According to a report from The Information, Qualcomm is in discussions to acquire privately held AI chip startup Tenstorrent for between $8 billion and $10 billion. Tenstorrent develops AI accelerators for model training and inference, positioning its technology as an alternative to traditional graphics processing units (GPUs) used in AI computing. The potential deal would also bring Tenstorrent CEO Jim Keller—a veteran chip architect who has held senior roles at AMD, Apple, and Tesla—into Qualcomm's fold.
While no transaction has been confirmed, investors view the reported talks as a signal of Qualcomm's commitment to strengthening its position in the AI hardware market. The company previously acquired UK-based Alphawave Semi for $2.4 billion last year, adding technology to improve inter-chip data-transfer speeds.
Investor Day to Spotlight Data-Center Ambitions
Attention is also turning toward Qualcomm's investor day scheduled for June 24. J.P. Morgan analyst Samik Chatterjee expects the company to provide details on its custom AI processors and data-center strategy. Chatterjee believes Qualcomm could outline a path to more than $3 billion in data-center revenue by fiscal 2027, with that figure potentially expanding to $35 billion by fiscal 2031.
“We are placing Qualcomm shares on Positive Catalyst Watch driven by expectations for targets outlined at the investor day to exceed investor expectations, even though we remain Neutral-rated awaiting evidence of execution to the outlined opportunities in an increasingly competitive market,” Chatterjee wrote in a recent research note. Investors are also anticipating the announcement of a major customer for Qualcomm's custom data-center chips.
Valuation Context
Qualcomm currently trades at over 20 times its projected earnings for the next year, making it a relatively cheaper option among chip stocks. For comparison, Arm Holdings trades at roughly 175 times its projected earnings. The company's growing focus on AI infrastructure has helped offset concerns about its traditional smartphone business and increasing competition in the PC chip market from rivals such as Nvidia.
CEO Envisions Broader AI Ecosystem
Qualcomm CEO Cristiano Amon recently discussed the company's broader AI strategy on CNBC's The Tech Download podcast. Amon noted that Qualcomm has more than 40 AI-enabled device designs in development, including smart jewelry, camera-equipped audio wearables, pins, and watches. He described smart glasses as a category that could eventually reach smartphone-like scale, with annual shipments already in the “tens of millions” and potentially growing to “hundreds of millions.”
Amon also highlighted the growing importance of agentic AI, which can perform tasks across multiple applications and platforms. “Those agents are going to be the new app,” he said.
For broader market context, see our coverage of Dow Rises 86 Points as Nasdaq Slides on Chip Selloff, SpaceX IPO Looms and Apple Stock Rises 1.6% Ahead of WWDC as Investors Eye AI-Powered Siri Revamp.
This article is for informational purposes only and does not constitute financial advice.
