Qualcomm (NASDAQ:QCOM) hasn’t enjoyed the same success as other AI stocks, with its shares only up by 15% over the past five years. However, that may soon change. The chipmaker told investors it is expanding to AI data centers and robotics, in a move that can boost momentum and generate meaningful stock gains.
However, an announcement isn’t enough to guarantee successful implementation. These are some of the details to consider as Qualcomm takes a closer look at AI and aims for the same type of run that Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), and Advanced Micro Devices (NASDAQ:AMD) have enjoyed.
The Business Is Gaining Momentum
Qualcomm posted 10% year-over-year revenue growth in Q4 FY25, along with a 14% year-over-year increase in earnings before taxes. Those are good metrics for a company that has a 36 P/E ratio, especially with data centers and robotics on the horizon.
The valuation leaves room for significant upside if Qualcomm can further scale its revenue. Qualcomm’s Q1 FY26 guidance suggests that revenue will continue to accelerate. The midpoint of guidance came in at $12.2 billion, which would be a 5% year-over-year increase.
While some momentum is better than slow growth, Qualcomm needs its AI investments to pan out to warrant a higher stock price. A mid-single-digit growth rate won’t be enough to excite investors, but if Qualcomm’s upcoming data center and robotics products become big hits, the stock is due for a rally.
The AI Business Has A Customer
Qualcomm will have to prove that its AI chips can keep up with competitors. Once that’s proven, some businesses will invest in Qualcomm’s chips to save money. The development of more AI chips can create additional pricing pressure, which should translate into accelerated revenue growth.
The AI chipmaker revealed in its Q4 FY25 presentation that HUMAIN became the first customer for Qualcomm’s AI inference-optimized Qualcomm AI200 and AI250 SoCs. Qualcomm also believes AI can help its IoT segment jump from $6.6 billion in fiscal 2025 to $14 billion in fiscal 2025. That represents an annualized 21% growth rate for the next four fiscal years. Qualcomm also believes that its automotive segment will more than double during the same timeframe.
The next stage of Qualcomm’s AI pursuits depends on providing a good experience for HUMAIN. If that goes well, other companies will gradually line up and request Qualcomm’s AI data center products. Its robotics segment may exhibit higher growth rates as humanoid robots like Optimus become more common.
Competition And Demand Are Both Intense
Qualcomm’s expanded AI efforts put it in the ring with some of the most valuable tech companies. Those firms have also created effective AI chips that generate billions of dollars in quarterly sales. Qualcomm is no slouch and has plenty of capital to invest in research and development.
While competition is tough, the demand for AI chips is insatiable. The same tech giants that poured billions of dollars into AI have told investors that they will spend even more money on this technology in 2026.
The AI industry can be filled with many winners as spending becomes parabolic. Investors should monitor Qualcomm’s progress with AI chips and may want to consider accumulating shares as more news comes out. For now, investing in current AI leaders or companies that are exhibiting tremendous growth is a better use of your money. Qualcomm stock is a relatively slow mover, which should give attentive investors enough time to enter a rally early once it gains momentum.
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