[Generated Title]: Qualcomm's AI Dreams: Or Just Another Chip in the Stack?
So, Qualcomm thinks they're gonna take on Nvidia and AMD in the data center AI game? Right. Like I haven't heard that one before. Every Tom, Dick, and Harry with a soldering iron thinks they can dethrone the AI kings.
Qualcomm, bless their hearts, announced these new AI chips – the AI200 and AI250 – slated for release in 2026 and 2027. 2027! That's like, a geological age in tech years. By then, Nvidia will be selling quantum processors that predict the future, and AMD will have figured out how to run AI models on potato batteries. Qualcomm's gonna be playing catch-up before they even leave the gate.
And this deal with Humain, this Saudi Arabia-backed AI firm? Two hundred megawatts of accelerator cards? Okay, sounds impressive. But let's be real, throwing hardware at a problem doesn't magically solve it. It's like buying a Ferrari and then realizing you only know how to drive a golf cart. What AI are they even planning to run with all that juice? And who exactly is Humain? I'm not saying anything shady is going on, but I ain't not saying it either.
Diversification: A Fancy Word for "Panic"?
For years, Qualcomm has been riding the smartphone wave, and now that's starting to look like a tsunami heading for shore. Apple's ditching them for in-house modems, Samsung might follow suit, and the whole damn market is "secularly stagnant," according to some Bank of America analyst. Seculary stagnant? Give me a break. It's dying, plain and simple. So offcourse, they're scrambling to find the next big thing. Automotive, IoT, and now AI. It all sounds great on paper, but executing it? That's another story.
This analyst, Tal Liani, calls the AI chips a "needed diversification." Translation: "Oh crap, our golden goose is about to keel over, we need something – anything – to replace it." He expects the AI chip market to hit $114 billion by 2030. That's a lotta cheddar, no doubt. But Qualcomm needs to prove they can actually deliver.
And then there's Citi analyst Christopher Danely, who increased the price target for QCOM stock but still slapped a "Hold" rating on it. He thinks the Humain deal is worth a billion in sales and a quarter per share in earnings. But he's also "skeptical about Qualcomm's success in AI," because they're "several years behind" Nvidia and AMD. See, even the analysts are hedging their bets.
The AI Analyst: A Robot's Opinion Matters?
TipRanks' AI Analyst – yes, apparently we're taking investment advice from robots now – has an "Outperform" rating on Qualcomm. The AI sees "solid financials" and "favorable earnings call insights." I don't know about you, but I'm not trusting my retirement fund to a glorified spreadsheet with an algorithm. What does it even mean that "technical analysis suggests a bullish trend"? Sounds like fortune cookie nonsense to me.
But hey, QCOM stock did beat expectations for Q4, reporting earnings of $3.00 per share on revenue of $11.27 billion. And they're projecting even better numbers for Q1. The handset business is still kicking, thanks to China. Automotive is up, IoT is up-ish. So maybe, just maybe, Qualcomm isn't completely delusional. According to Qualcomm (QCOM) Is About to Report Q4 Earnings. Here’s What to Expect, the company was expected to perform well.
Then again, the stock is up 17% year-to-date, but it's still lagging behind the Nasdaq, and it's miles behind Nvidia and AMD. BofA is hoping Qualcomm's "valuation multiple" will expand as the other businesses grow. But that's just fancy talk for "we're hoping people will start believing the hype."
So, What's the Real Story?
Look, I'm not saying Qualcomm is doomed. They've got smart people, deep pockets, and a track record of innovation. But this whole AI play feels like a desperate attempt to stay relevant in a rapidly changing world. They're late to the party, they're facing stiff competition, and they're betting the farm on a technology that's still evolving. Maybe they'll pull it off. Maybe they'll become the next Nvidia. But honestly, I wouldn't bet my lunch money on it.