Qualcomm stock rises on AI chip push, Tenstorrent deal speculation

Qualcomm QCOM shares moved higher on Tuesday as investors focused on the chipmaker's expanding artificial intelligence ambitions.

Investors also reacted to reports of a potential acquisition and expectations for new details on the company's data-center strategy at an upcoming investor event.

The stock gained about 3% in premarket trading to $228.09, extending a strong rally that has seen shares rise roughly 68% over the past three months.

Investors appear increasingly focused on Qualcomm's efforts to diversify beyond its traditional smartphone business and establish a larger presence in the rapidly growing market for AI infrastructure and data-center chips.

Qualcomm reportedly explores Tenstorrent acquisition

A major source of investor interest emerged after a report from The Information indicated that Qualcomm is in discussions to acquire privately held AI chip startup Tenstorrent for between $8 billion (approx. AED 29.4 billion) and $10 billion (approx. AED 36.7 billion).

Tenstorrent develops AI accelerators designed for model training and inference workloads and has positioned its technology as an alternative to traditional graphics processing units used in AI computing.

The potential acquisition could also provide Qualcomm with access to Tenstorrent Chief Executive Officer Jim Keller, one of the semiconductor industry's most prominent chip architects.

Keller previously held engineering roles at AMD, Apple, and Tesla.

The reported talks come as Qualcomm continues to expand its AI-related capabilities.

Last year, the company completed its acquisition of UK-based Alphawave Semi for $2.4 billion (approx. AED 8.8 billion), adding technology designed to improve inter-chip data-transfer speeds.

While no transaction has been announced, investors view the potential deal as another sign of Qualcomm's commitment to strengthening its position in the AI hardware market.

Investor day expected to highlight data-center ambitions

Attention is also turning toward Qualcomm's investor day scheduled for June 24.

J.P. Morgan analyst Samik Chatterjee said investors are expecting additional details regarding Qualcomm's custom AI processors and data-center strategy.

The analyst believes the company could outline a path to more than $3 billion (approx. AED 11 billion) in data-center revenue by fiscal 2027, with that figure potentially expanding to $35 billion (approx. AED 128.6 billion) by fiscal 2031.

“We are placing Qualcomm shares on Positive Catalyst Watch driven by expectations for targets outlined at the investor day to exceed investor expectations, even though we remain Neutral-rated awaiting evidence of execution to the outlined opportunities in an increasingly competitive market,” Chatterjee wrote in a recent research note.

Investors are also anticipating the announcement of a major customer for Qualcomm's custom data-center chips.

The company's growing focus on AI infrastructure has helped offset concerns surrounding its smartphone business and increasing competition in the PC chip market from rivals, including Nvidia.

Qualcomm is trading above 20 times its projected earnings in the next year, making it a cheaper option among chip stocks.

For comparison, Arm Holdings trades around 175 times its projected earnings.

CEO outlines broader AI ecosystem vision

Qualcomm Chief Executive Officer Cristiano Amon recently discussed the company's broader AI strategy during an appearance on CNBC's The Tech Download podcast.

According to Amon, Qualcomm currently has more than 40 AI-enabled device designs in development, including smart jewelry, camera-equipped audio wearables, pins, and watches.

He described smart glasses as a category that could eventually reach smartphone-like scale.

Amon noted that annual shipments are already measured in the "tens of millions" and could eventually grow into the "hundreds of millions."

Amon also highlighted the growing importance of agentic AI, which can perform tasks across multiple applications and platforms.

“Those agents are going to be the new app,” he said.