(Reuters) – Qualcomm shares rose about 10% on Thursday after the smartphone-focused semiconductor maker signaled a recovery in AI-powered demand, especially in China, after years of weakness, ending a two-year decline. It reached an all-time high.
The company said Wednesday that sales to Chinese smartphone makers surged 40% in the first half of the fiscal year. This is because Chinese buyers are gravitating toward more expensive devices that can support AI chatbots.
“Chinese vendors that have traditionally relied heavily on MediaTek will start leveraging Qualcomm's high-end chips more as they focus on their AI agenda,” said IDC analyst Nabila Popal.
“These are further upsides for Qualcomm, as it comes from a difficult past two years and much of this year's recovery will come from Chinese OEMs.”
Qualcomm on Wednesday expected third-quarter sales to beat expectations, also benefiting from the Internet of Things (IoT) and automotive sectors.
The company, the largest supplier of smartphone chips, was on track to increase its market value by more than $18 billion if it maintained profits during the session.
The Philadelphia Semiconductor Index rose 1.4% on Wednesday after falling 3.5% on lackluster results from semiconductor companies Advanced Micro Devices and Super Micro Computer.
In the high-end segment, AI buzz and foldable products could help Android smartphone vendors further differentiate themselves from Apple, according to preliminary data from research firm IDC. It is said that interest has increased.
Analysts at Wolfe Research are optimistic that numbers could rise further given last year's weak Android cycle and potential improvements in the Internet of Things (IoT) as inventories normalize. “
At least 14 analysts raised their price targets for Qualcomm, according to LSEG data.
Qualcomm stock rose 9.7% to $180.31 in early trading, on track to add to its 13.5% rise this year.
Apple's stock, which is scheduled to report earnings after the market closes on Thursday, rose 1.2%.
(Reporting by Harshita Mary Varghese; Additional reporting by Arsheeya Bajwa; Editing by Sriraj Kaluvila)
