Qualcomm stock market shows investors are ‘waking up’ to the boom in AI devices

Qualcomm stock soared 12% on Friday and is up 75% so far last month as the chipmaker’s increasingly central position in the physical AI boom becomes clearer on Wall Street. Stocks are trading at record highs.

Qualcomm has lagged behind giants like Nvidia in the race for chips that power AI models and workloads, but the company is using its dominance in smartphones to solidify its role as a major player in connected devices, whether it’s glasses, cars or robots.

OpenAI is also reportedly partnering with Qualcomm to develop AI chips that can power future devices run by AI agents.

“This company will return to its former glory and lead the connected device revolution,” said Ivan Feinseth, an analyst at Tigress Financial Partners, who is evaluating the Qualcomm acquisition. Investors are “waking up to this fact,” he said.

Regarding Qualcomm’s work with OpenAI, Feinseth was bullish about future devices, calling it “a phone that will be an AI-based operating system that does everything.”

Qualcomm is at the heart of a number of gadgets that run AI at the so-called edge rather than in the cloud. For that, Microsoft’s Surface PC and smart glasses google And meta. the armThe base chips offer an energy-efficient alternative to those made by central processing processor leader Intel. advanced micro device.

On Thursday, Qualcomm announced a deal with the automaker StellantisThe company said it will use its Snapdragon processors to “support advanced, integrated computing power throughout the vehicle, including the cockpit, connectivity, and advanced driver assistance systems.”

Stellantis owns a broad portfolio of brands including Alfa Romeo, Chrysler, Dodge, Fiat, Jeep and Maserati.

“Customers can choose from multiple driving modes, allowing them to enjoy a smooth, immersive and safe self-driving experience on city streets and highways,” Ned Kulick, Stellantis’ head of product development, said at the company’s investor day on Thursday.

Qualcomm also has a similar agreement with Bosch. volkswagenHyundai and BMW. In its latest financial report, Qualcomm announced that its automotive business’s sales increased 38% year over year to $1.3 billion. The company says more than 1 million cars are already running autonomous systems on Qualcomm processors.

Friday’s stock rally is also tied to investor excitement about Qualcomm’s entirely new line of business: data center chips.

Qualcomm’s upcoming AI200 and AI250, announced last year, are custom AI accelerators, a more programmable type of chip than Nvidia’s graphics processing units that have dominated AI workloads to date. The chip is expected to be available later this year and will be available in full rack-scale systems similar to Nvidia’s Vera Rubin and AMD’s upcoming Helios systems.

Qualcomm CEO Cristiano Amon said during an April earnings call that the company will begin shipping data center chips to “major hyperscalers” within the calendar year. Investors will hear more information when Amon gives a keynote speech at the Computex conference in Taiwan on June 2nd and Qualcomm’s Investor Day on June 24th.

—CNBC’s Kristina Partinevelos contributed to this report

clock: Qualcomm is betting big on AI and automation to maintain wireless dominance