Qualcomm Set to Outshine Nvidia, AMD, and Broadcom in AI Chip Boom
The semiconductor industry is dominated by Nvidia, AMD, and Broadcom, which have seen their share prices surge over 300% in the past three years due to their strong presence in artificial intelligence (AI) chips.
However, Qualcomm, a lesser-known player, is poised to outperform its peers with its growing influence in AI chips. The company's recent contract wins and partnerships with major hyperscalers such as Meta Platforms and Amazon are expected to boost its data center revenue significantly.
Qualcomm estimates that its data center revenue will reach $5 billion in fiscal 2027 and scale up to $15 billion in fiscal 2029, driven by the growing demand for AI chips. This growth is expected to lift Qualcomm's revenue from a 3% decline in fiscal 2026 to a significant improvement in the next couple of years.
The company's valuation is attractive, trading at under 17 times forward earnings, making it an undervalued opportunity for investors. If its earnings-per-share growth rate approaches 25% in fiscal 2028 and its price-to-earnings ratio increases to 30, Qualcomm's stock price could jump to $390, a 124% increase from its current level.