Key Takeaways
- QCOM shares climbed approximately 4% during Tuesday’s pre-market session following reports of a possible $8B–$10B Tenstorrent acquisition
- This acquisition would strengthen Qualcomm’s data-center capabilities and secure the expertise of prominent chip designer Jim Keller
- CEO Cristiano Amon disclosed that Qualcomm is developing over 40 AI-powered device designs, spanning wearables to smart glasses
- The company’s June 24 investor day may unveil data-center revenue projections exceeding $3B by 2027 and reaching $35B by 2031
- Analyst consensus rates QCOM as a “Hold” with an average price target of $184.36
Qualcomm shares experienced a notable 4% surge during Tuesday’s pre-market trading, reaching $228.09, as investors digested two significant developments — discussions surrounding a major acquisition and the CEO’s forward-looking AI strategy.
This upward momentum builds on an already strong performance. Over the past three months, QCOM has surged 68%, while year-to-date gains stand at approximately 30%.
The catalyst emerged Monday evening when The Information disclosed that Qualcomm has entered negotiations to acquire AI chip developer Tenstorrent for a valuation between $8 billion and $10 billion. Both companies declined to comment when approached Tuesday morning.
Tenstorrent specializes in developing accelerators designed for AI model training and inference workloads. The startup maintains that its chips deliver superior efficiency for specific AI applications compared to general-purpose GPUs manufactured by Nvidia and competitors.
Beyond the technology itself, this potential acquisition carries additional significance. Tenstorrent is led by Jim Keller, a legendary chip architect whose resume includes stints at AMD, Apple, and Tesla. His addition to Qualcomm would signal the company’s serious commitment to AI chip leadership.
According to reports, negotiations remain active, and both the valuation and final terms could still shift.
June Investor Day Holds Strategic Importance
Attention now turns to Qualcomm’s upcoming investor day on June 24. J.P. Morgan analyst Samik Chatterjee anticipates the company will unveil data-center revenue projections surpassing $3 billion for fiscal 2027, with ambitions to reach $35 billion by fiscal 2031.
Chatterjee has placed Qualcomm on “Positive Catalyst Watch” while keeping a Neutral rating, pointing to growing competition and the necessity of demonstrating execution capabilities.
Additionally, the company is anticipated to reveal a major client for its custom data-center chip offering during this presentation.
Amon Outlines Comprehensive AI Device Strategy
During an appearance on CNBC’s The Tech Download podcast, CEO Cristiano Amon revealed that Qualcomm is actively developing more than 40 designs for AI-enabled devices — encompassing smart jewelry, earbuds with integrated cameras, wearable pins, and smartwatches.
Amon also emphasized the growth potential of smart glasses as a product category that could rival smartphone volumes. He noted that current annual shipments already measure in the “tens of millions” with potential to scale to “hundreds of millions.”
Discussing agentic AI, Amon explained that AI agents will progressively manage sophisticated tasks spanning multiple applications and platforms. He offered an illustration: an agent capable of instantly retrieving specific banking transaction information without manual searching.
“Those agents are going to be the new app,” he stated.
Qualcomm has been systematically expanding its capabilities. In 2024, the company completed a $2.4 billion acquisition of U.K.-based Alphawave Semi, gaining technology that accelerates chip-to-chip data transmission.
Market participants appear to be looking past concerns regarding elevated memory costs impacting smartphone demand, along with the potential loss of Apple’s modem business as the tech giant transitions to proprietary chip designs.
The Street’s consensus stands at Hold — comprising 19 Hold ratings, 8 Buy ratings, and 4 Sell ratings — with an average price target of $184.36, implying potential downside of 16.5% from present trading levels.
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