Qualcomm Stock Surges on Amazon AI Deal and Data-Center Growth
Qualcomm's stock surged by 5% on Tuesday after analysts at StoneX expressed optimism about the company's expansion into data-center chips. The collaboration with Amazon on customized AI silicon and high-speed optical connectivity for data centers is seen as a new growth avenue for Qualcomm, beyond its traditional smartphone business.
According to StoneX analyst Cody Acree, who maintained a Buy rating and $270 price target on Qualcomm, the company's data-center business is expected to generate around $5 billion in revenue by fiscal 2027, rising to over $15 billion by fiscal 2029. This growth comes as Qualcomm diversifies its operations across various markets, including automotive and IoT.
Qualcomm's handset business has faced challenges, with a 20% year-over-year decline in fiscal third-quarter handset revenue to $5.09 billion. However, analysts believe that the company's non-handset operations will become a significant contributor to its semiconductor business, shifting investor focus towards execution in newer markets.