Qualcomm (QCOM -2.16%) spent most of this summer and fall proving it's not just a smartphone chip company anymore, and the stock, around $180 at this writing, is still catching up to that story. The stock has been somewhat lackluster throughout much of this summer, trading sideways after hitting above $250 in May and early summer.
A $1,000 investment today buys a little more than five shares. This fall, Qualcomm locked in a massive new data center customer, landed a second one most investors didn't see coming, launched its next flagship phone chip around AI running on the device itself, and renewed one of its oldest licensing relationships. I think its recent stretch justifies a bullish, multiyear view of Qualcomm.
NASDAQ: QCOM
Key Data Points
Qualcomm just signed two real data center customers
In early September, Qualcomm and Amazon (AMZN +1.42%) announced a multiyear deal under which Amazon Web Services could purchase up to $60 billion in Qualcomm server chips, hardware, and high-speed optical networking gear over the next decade, with Qualcomm issuing Amazon warrants tied to the amount it actually buys. The stock jumped as much as 10% on the news.
Image source: Getty Images.
Also this year, reports surfaced that Qualcomm had struck a separate deal to supply ByteDance, the owner of TikTok, with millions of custom AI application-specific integrated circuits (ASICs) to run its AI agent software, according to Bloomberg. Two major cloud and internet companies committing real dollars to Qualcomm's chips is a different story from a single pilot program; it suggests buyers outside Qualcomm's usual phone customers are starting to take its data center ambitions seriously.
NASDAQ: AMZN
Key Data Points
Its Edge AI is showing up in cars and now in phones again
Qualcomm's automotive chip business, which supplies the computing brains behind car infotainment and driver-assist systems, posted record quarterly revenue of $1.59 billion last quarter, up 61% year over year, extending a streak of 23 straight quarters of double-digit growth. Management has pointed to a longer-term goal of $40 billion in combined automotive, industrial, and data center revenue by fiscal 2029.
At its Snapdragon Summit in Hawaii in late September, Qualcomm unveiled its new Snapdragon 8 Elite Gen 6 and Gen 6 Pro chips, built around what it calls the "agentic age." To keep it simple, this involves phones using edge AI to run AI agents locally rather than just querying a chatbot in the cloud.
What this could mean for a $1,000 investment
Qualcomm also removed a long-running overhang this fall by renewing its global patent-licensing agreement with Apple through at least April 2027, protecting a high-margin royalty business that had been clouded by Apple's push to build its own modem chips. Basically, even though Apple is moving away from Qualcomm's modem chips, it still needs Qualcomm's wireless technology patents, so this deal keeps that licensing relationship in place starting in 2027.
Turning $1,000 into $2,200 requires the stock to gain about 127%, which, at today's roughly $180 share price, works out to a target of around $410 per share. Qualcomm itself has given investors a specific yardstick to measure that against: at its June 2026 investor day, management targeted more than $18 in non-GAAP earnings per share for fiscal 2029, alongside that $40 billion non-handset revenue goal, including more than $15 billion from data center AI infrastructure alone. Divide a $410 share price by $18 in earnings, and you get a forward price-to-earnings ratio of about 22.8, meaning investors would be paying roughly $22.80 for every dollar of Qualcomm's projected future earnings.
That's higher than Qualcomm's current forward P/E of around 18.1, but it isn't a dramatic leap into richly valued AI-stock territory; it's closer to what a successfully diversified semiconductor company with real data center and automotive revenue typically commands. Framed as an annual growth rate, turning $1,000 into $2,200 over the roughly three years between now and fiscal 2029 works out to a stock price compounding at close to 30% a year, which is aggressive, but possible given what Qualcomm has going on.
Put all this together: two new data center customers, a record automotive business, a flagship chip pitched around on-device AI, and a secured licensing deal, and the case for Qualcomm rerating away from its smartphone-stock discount gets stronger. If that diversification continues at anywhere near this pace, combined with Qualcomm's roughly 2% dividend yield and its $20 billion buyback shrinking the share count, I'd expect a $1,000 investment made today to plausibly be worth somewhere between $2,200 and $2,800 by 2030, with more upside if Amazon and ByteDance scale into recurring, multiyear revenue.
None of this is guaranteed. But a company landing this many concrete wins deserves more credit than the market is currently giving it.
