Sound Shore Management, an investment management firm, highlighted QUALCOMM Incorporated (NASDAQ: QCOM) as a notable contributor in its Q2 2026 investor letter, citing the chipmaker’s growing AI exposure.
The firm’s Sound Shore Fund Investor Class (SSHFX) and Institutional Class (SSHVX) rose 10.48% and 10.58% respectively in the second quarter of 2026, trailing the Russell 1000 Value Index’s return of 13.87%.
Both share classes also underperformed the S&P 500, which posted a 15.20% return over the same period, though longer-term results paint a more competitive picture.
Over three years, SSHFX and SSHVX delivered annualized gains of 19.41% and 19.66%, outpacing the Russell 1000 Value Index’s 17.79% but falling short of the S&P 500’s 20.61% annualized return.
Sound Shore attributed the broader market’s powerful quarterly rebound to strong performances in AI and semiconductor sectors, alongside easing inflation fears and a stable labor market.
The fund noted that its portfolio benefited directly from the AI wave during the second quarter, with Qualcomm emerging as one of its strongest contributors.
Sound Shore stated in its letter: “QUALCOMM Incorporated (NASDAQ: QCOM) and Marvell Technology, were two of our strongest contributors in 2Q.”
The firm described both companies as “excellent case studies” that marry secular technology tailwinds with compelling valuations, a combination it first profiled in its first quarter letter.
In its assessment of Qualcomm specifically, Sound Shore wrote: “A leading semiconductor supplier, Qualcomm (QCOM) is rapidly diversifying its business; its developer tools are accelerating edge AI functionality in new markets, driving demand for QCOM chips.”
The firm expressed confidence in Qualcomm’s long-term positioning, stating: “We believe Qualcomm possesses the strategic flexibility required to capture the immense AI opportunity ahead.”
A key element of Sound Shore’s investment thesis rests on valuation, with the firm stating it believes “Qualcomm is trading for an attractive 10 times earnings power once the new business kicks in.”
Qualcomm shares closed at $158.53 on August 24, 2026, reflecting a one-month return of -2.08% and a modest 52-week gain of 0.20%.
The company currently carries a market capitalization of $167.55 billion, and hedge fund interest has grown notably, with 95 fund portfolios holding the stock at the end of Q2 compared to 71 in the prior quarter.
Sound Shore’s value discipline, which steers the firm away from the most expensive corners of the market, has kept its IT weighting at approximately 15%, even as AI-driven enthusiasm has pushed valuations higher across the sector.
The firm remains committed to long-term assessments of earning power and targets stocks with durable management strategies, a philosophy that underpins its continued conviction in Qualcomm heading into the second half of 2026.
