Qualcomm (QCOM) was primarily viewed as a smartphone chip giant, powering millions of Android devices around the world. But the artificial-intelligence (AI) boom is rapidly transforming the company’s growth narrative. Qualcomm stock surged to fresh record highs on Tuesday after reports revealed the chipmaker had secured a major AI infrastructure deal with ByteDance, the parent company of TikTok.
Under the agreement, ByteDance will reportedly buy millions of Qualcomm’s AI-focused ASIC chips for data centers to support its growing AI software operations. The deal marks ByteDance as Qualcomm’s first major customer for its AI ASIC business and represents an important diversification win as Qualcomm expands beyond smartphones after Apple (AAPL) shifted toward in-house modem chips. Qualcomm has also been growing its presence in PCs, laptops, and robotics.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
About Qualcomm Stock
Headquartered in San Diego, Qualcomm is a leading semiconductor and wireless technology company best known for designing Snapdragon processors and modem chips used in smartphones, PCs, automotive systems, and connected devices worldwide. Qualcomm has increasingly expanded beyond its traditional handset business into AI infrastructure, automotive technology, edge computing, and data center chips. Additionally, the company is investing heavily in AI accelerators and custom ASICs to capitalize on rising demand for generative AI applications. Qualcomm currently has a market cap of $246 billion, making it one of the world’s largest semiconductor companies.
Qualcomm stock has been one of the semiconductor sector’s strongest performers in 2026, fueled by growing investor optimism around its expanding AI business and diversification beyond smartphones. Shares are up 42.65% year-to-date (YTD) and have delivered gains of 65.31% over the past 52 weeks.
The rally accelerated sharply in recent weeks as enthusiasm surrounding Qualcomm’s AI data center ambitions intensified and investors focused on long-term potential rather than the short-term hiccups. The stock has surged 62.66% in just over the past month.
Most recently, Qualcomm shares climbed to a fresh 52-week high of $258 on May 26, with intraday gains of 4.48%, driven by reports of a major AI chip supply agreement with ByteDance. However, the stock retreated 6.2% in the following session.
www.barchart.com However, the stock still seems to be trading at a modest discount compared to industry peers at 31.13 times forward earnings.
Soft Q2 Performance
Qualcomm released its second quarter fiscal 2026 (ended Mar. 29) results on April 29, highlighting its diversification strategy. The company reported revenue of $10.6 billion, down 3% year-over-year (YOY), while non-GAAP revenue declined 2% from the prior-year quarter. Non-GAAP earnings per share (EPS) came in at $2.65, down 7% YOY from $2.85 but above expectations.
Within its core chip division, QCT revenue declined 4% YOY to $9.1 billion as weakness in the smartphone market and memory shortages weighed on handset demand. However, Qualcomm’s diversification efforts continued gaining traction. Automotive revenue surged 38% YOY, while IoT revenue increased 9%, underscoring the company’s push beyond smartphones into connected devices, edge AI, and automotive platforms.
Management also emphasized Qualcomm’s growing AI opportunities, particularly in data center and custom AI chips. CEO Cristiano Amon said the company’s hyperscaler custom silicon engagement remains on track for initial shipments later in 2026, reinforcing Qualcomm’s ambitions in AI infrastructure.
For the third quarter of fiscal 2026, Qualcomm guided for revenue between $9.2 billion and $10 billion and adjusted EPS between $2.10 and $2.30, both below Wall Street expectations due to continued weakness in Android smartphone demand and lingering memory supply constraints.
Despite the softer guidance, investors responded positively to Qualcomm’s long-term AI and data center growth narrative, sending the stock sharply higher following the earnings release. The stock gained around 15.12% on April 30.
The consensus EPS estimate of $7.99 for fiscal 2026 reflects a decrease of 20.7%, while the EPS estimate of $7.85 for fiscal 2027 indicates a 1.75% slump YOY.
What Do Analysts Expect for Qualcomm Stock?
This month, Tigress Financial Partners raised its price target on Qualcomm to $280 and maintained its “Buy” rating following the company’s second-quarter fiscal 2026 results. The firm highlighted Qualcomm’s transformation from a traditional CDMA provider into a broader “intelligent connectivity” company driven by AI, automotive, IoT, and XR technologies.
However, Aletheia Capital reiterated a “Hold” rating on QCOM following the earnings report.
Plus, KeyBanc maintained a “Sector Weight” rating on Qualcomm following its fiscal second-quarter 2026 results, noting that while quarterly results were largely in line with expectations, third-quarter guidance came in weaker due to soft demand from China Android smartphone makers.
Overall, QCOM has a consensus “Hold” rating. Of the 35 analysts covering the stock, nine advise a “Strong Buy,” two suggest a “Moderate Buy,” 19 analysts are on the sidelines, giving it a “Hold” rating, two recommend a “Moderate Sell,” and three offer a “Strong Sell” rating.
While the stock has surged past the average analyst price target of $181.21, the Street-high target price of $300 suggests that the stock could rally as much as 23%.
www.barchart.com 
www.barchart.com On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Qualcomm Stock Just Hit New Record Highs. Investors Can Thank a ByteDance Deal. ARM Stock Is Valued for Eternity, But Silicon Has an Expiration Date TSMC CEO Promises Staff Massive 30% Bonus Bump as Profits Surge. This Is a Clear Message for TSM Stock Bulls. 2 Warren Buffett-Inspired Fund Managers Disagree on Amazon Stock, and Why I’m Staying on the Sidelines Here