Qualcomm (QCOM) Stock Surges 4% Amid Tenstorrent Deal Rumors and AI Expansion Plans

Key Takeaways

Table of Contents

QCOM shares jumped approximately 4% during Tuesday’s pre-market session following news of a possible $8B–$10B Tenstorrent acquisition
Acquiring Tenstorrent would strengthen Qualcomm’s data-center strategy and add legendary chip designer Jim Keller to its team
Cristiano Amon, Qualcomm’s CEO, disclosed the company is developing over 40 AI-powered device designs spanning wearables to smart eyewear
The June 24 investor day may unveil data-center revenue projections exceeding $3B by 2027 and reaching $35B by 2031
Analysts maintain a consensus “Hold” rating on QCOM shares with a mean price target of $184.36

Shares of Qualcomm climbed approximately 4% during Tuesday’s pre-market trading session, reaching $228.09, as two significant developments emerged simultaneously — potential acquisition discussions and an expansive AI device strategy from the company’s chief executive.

QUALCOMM Incorporated, QCOM

This uptick extends an already remarkable performance streak. The stock has surged 68% throughout the past three months and posted approximately 30% gains year-to-date.

Monday evening brought major developments when The Information disclosed that Qualcomm has entered negotiations to purchase AI semiconductor startup Tenstorrent in a transaction valued between $8 billion and $10 billion. Both companies declined to comment on the matter Tuesday morning.

Tenstorrent specializes in accelerator chips designed for AI model training and AI workload execution. The startup maintains its processors handle specific AI operations more effectively than traditional GPUs manufactured by Nvidia and competitors.

Beyond the technology itself, a significant attraction involves Tenstorrent’s leadership. Jim Keller, the company’s CEO, brings prestigious credentials as a chip architect with previous roles at AMD, Apple, and Tesla. Securing his expertise would signal Qualcomm’s serious commitment to the space.

Negotiations remain active, meaning the valuation and final outcome remain uncertain.

June Investor Day Takes Center Stage

Attention now shifts to Qualcomm’s investor day presentation scheduled for June 24. J.P. Morgan’s analyst Samik Chatterjee anticipates Qualcomm will unveil data-center revenue objectives surpassing $3 billion for fiscal 2027, with expansion to $35 billion by fiscal 2031.

Chatterjee added Qualcomm to his “Positive Catalyst Watch” list while keeping a Neutral rating, pointing to “increasingly competitive market” dynamics and the necessity of demonstrating execution against these ambitious goals.

The company is also anticipated to identify a significant client for its customized data-center processor during the presentation.

Amon Outlines Vision for AI-Powered Devices

During an appearance on CNBC’s The Tech Download podcast, CEO Cristiano Amon revealed Qualcomm is actively developing more than 40 designs for AI-enabled devices — products ranging from smart jewelry and camera-integrated earbuds to pins and smartwatches.

Amon presented a compelling argument for smart glasses evolving into a product category comparable to smartphones. He noted current yearly shipments already number in the “tens of millions” with potential to expand into “hundreds of millions.”

Regarding agentic AI, Amon explained AI agents will progressively manage sophisticated tasks spanning multiple applications and platforms. He illustrated with an example: an agent that immediately retrieves banking transaction information without requiring manual user searches.

“Those agents are going to be the new app,” he said.

Qualcomm has been systematically expanding its technological capabilities. In 2023, it completed the $2.4 billion acquisition of U.K.-based Alphawave Semi, obtaining technology that enhances data transfer rates between processors.

Market participants are currently overlooking concerns about elevated memory costs impacting smartphone demand, plus the potential loss of Apple as a modem client as the iPhone manufacturer transitions to proprietary chip designs.

Wall Street’s consensus recommendation stands at Hold — comprising 19 Hold ratings, 8 Buy ratings, and 4 Sell ratings — with a mean price objective of $184.36, implying 16.5% potential downside from present trading levels.

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