Qualcomm Shares Surge as Company Pivots Toward Data Center AI Silicon

Qualcomm (NASDAQ: QCOM) saw its stock price soar on Thursday, gaining 15.1% to reach $178, as investors reacted positively to the company's strategic expansion into the data center processor market. This rally marks a significant recovery for the stock, which has climbed 45% from its early April lows. While the company's core handset business continues to dominate its revenue stream, the announcement of a new venture into custom silicon for a leading hyperscaler signals a pivot toward the high-growth AI infrastructure space. CEO Cristiano Amon confirmed during the earnings call that the company is ramping up production in the custom silicon space, with initial shipments expected to begin in December. For the quarter ending in March, Qualcomm reported revenue of $10.6 billion and earnings per share of $2.65. Both figures slightly exceeded consensus estimates of $10.56 billion and $2.55, respectively, despite a 2% drop in revenue and a 7% drop in profit compared to the previous year. However, the company provided a cautious outlook for the third fiscal quarter. Revenue guidance was set between $9.2 billion and $10.0 billion, falling short of the $10.23 billion analysts had anticipated. Earnings guidance for the period was projected between $2.10 and $2.30 per share. Despite the soft guidance, the market focused on the long-term potential of the data center business. While several analysts raised their price targets following the update, some caution remains regarding the stock's rapid ascent, with some new targets remaining near or below the current trading price.