Qualcomm, Inc. (NASDAQ: QCOM) shares surged 4.3% on Tuesday, reaching a two-month high before paring some gains slightly in overnight trading.
Investors increasingly warmed to the chipmaker’s expanding push into AI data-center infrastructure, a space Qualcomm has historically had limited presence in.
The rally followed StoneX reiterating its Buy rating and $270 price target for the company, citing encouraging leverage in Qualcomm’s data-center business.
StoneX acknowledged that demand across Qualcomm’s broader portfolio remains uneven, even as the data-center opportunity becomes more defined.
Last week, Qualcomm announced a multigenerational collaboration with Amazon to develop customized AI chips for AWS, a deal that drew strong reactions from analysts tracking the chipmaker.
Under the long-term arrangement, Amazon could purchase up to $60 billion of Qualcomm’s AI data-center chips and related products, representing a significant expansion of the company’s revenue base.
Qualcomm is also developing high-speed optical connectivity solutions with Amazon, extending its addressable opportunity beyond compute chips alone.
The partnership carries particular weight because Qualcomm has historically been viewed primarily as a smartphone-chip company, with limited exposure to the hyperscaler AI infrastructure boom that has driven peers like Nvidia and Broadcom sharply higher.
Investors have also long treated the company’s reliance on Apple as an overhang, given Apple’s sustained effort to develop its own modem technology in-house.
The Amazon deal changes that narrative by giving Qualcomm a marquee hyperscaler relationship and a clearer path to diversify beyond the smartphone market.
The contract win arrives at a critical moment for the company, whose third-quarter profit fell to $2 billion from $2.67 billion a year earlier, dragged down by a 20% drop in handset sales, higher input costs, and supply-chain pressures.
Revenue declined 4% to $9.95 billion during the same period, and the company issued a weaker-than-expected fourth-quarter profit outlook.
Retail sentiment on Stocktwits dipped to bearish for QCOM as of late Tuesday, though some traders expressed optimism about the stock’s shifting identity.
One trader wrote: “$QCOM is escaping some of that selling because its story has changed from: ‘smartphone semiconductor company’ to: ‘smartphone + automotive + edge AI + potentially huge Amazon data-center business.'”
Another posted: “$QCOM A lot of catalysts for this stock. Holding good amid the sector weakness. Can reach $200 by Friday.”
Among Wall Street analysts, 23 out of 37 recommend Hold on QCOM shares, 11 recommend Buy or higher, and three rate it Sell or lower, according to Koyfin data.
The analyst consensus carries an average price target of $194.13, implying approximately 3.4% upside from the stock’s last closing price.
