Qualcomm soars 12% as Stellantis deepens AI vehicle partnership

Shares of Qualcomm QCOM Incorporated surged 12% after Stellantis announced a major expansion of its multi-year technology partnership with the chipmaker.

The move will enhance Qualcomm’s role in next-generation connected and autonomous vehicles.

The expanded agreement will integrate Qualcomm’s Snapdragon Digital Chassis system-on-chips across Stellantis’ future vehicle lineup, covering cockpit systems, connectivity, and advanced driver assistance technologies.

The collaboration also includes Qualcomm’s Snapdragon Ride Pilot platform, which supports advanced safety systems and Level 2+ hands-free autonomous driving capabilities across millions of vehicles.

As part of the deal, Stellantis’ automated driving and simulation company, aiMotive, is also intended to join Qualcomm Technologies.

The announcement added to investor optimism around Qualcomm’s growing automotive business as the company continues diversifying beyond its traditional smartphone chip operations.

Automotive partnership boosts diversification strategy

The Stellantis expansion marks another step in Qualcomm’s effort to build out its automotive and artificial intelligence-related businesses.

Qualcomm’s automotive segment has already surpassed $5 billion in annual revenue, reflecting growing demand for connected vehicle technologies and software-defined automotive platforms.

Nakul Duggal, EVP and Group General Manager, Automotive, Industrial and Embedded IoT at Qualcomm Technologies, described the partnership expansion as “a meaningful inflection point for both companies.”

He added that the Snapdragon Digital Chassis platform enables scalable deployment of unified computing capabilities across multiple vehicle brands and models.

Investors have increasingly viewed Qualcomm’s automotive and AI initiatives as critical to reducing the company’s reliance on the cyclical smartphone market.

The Stellantis agreement was widely seen as a strong validation of that diversification strategy, particularly as automakers accelerate investments in advanced software, connectivity, and autonomous driving systems.

Qualcomm has also continued expanding into data center and physical AI infrastructure opportunities, with hyperscaler-related engagements expected to begin shipping later in 2026.

Analysts raise targets amid AI optimism

Melius Research, recently raised its price target on Qualcomm shares to $220 from $170 while maintaining a Hold rating.

The firm said it was becoming “incrementally good” about memory and AI semiconductor companies despite limited new developments emerging from recent US-China discussions.

Melius also raised long-term estimates and targets across several semiconductor companies tied to artificial intelligence infrastructure demand.

Separate reports also suggested AI chip startup Tenstorrent has attracted early acquisition interest from prospective buyers, including Intel and Qualcomm.

Broader enthusiasm around AI-related semiconductors has continued supporting sentiment across the chip sector.

Counterpoint Research recently estimated that smartphones capable of supporting agentic AI features represented roughly 4% of the market by the end of 2025 and could rise to 32% by 2027.

That projection suggests roughly one in three smartphones sold by 2027 may support advanced AI-driven features, potentially strengthening long-term demand for Qualcomm’s mobile processors.

Semiconductor sector remains supported by AI demand

The broader market environment also remained supportive for semiconductor stocks during Friday’s session.

The S&P 500 rose roughly 0.65%, while the Dow Jones Industrial Average gained about 0.81%.

The Nasdaq Composite added around 0.68%.

Shares of AI-related semiconductor companies have remained a major driver of broader market gains in recent months as investors continue rotating into companies tied to artificial intelligence infrastructure and computing demand.

For Qualcomm, investors appeared encouraged by the combination of growing automotive exposure, AI-related growth opportunities, and improving analyst sentiment.