Qualcomm (QCOM) Stock Surges 66% as It Takes Aim at Nvidia’s Data Center Crown

TLDR

• Qualcomm acquired AI software company Modular in an all-stock deal worth ~$4 billion, adding AI inference software and a new programming language to its portfolio.
• The company debuted its Dragonfly C1000 CPU and HBC inference chip platform at its investor day, targeting the data center market.
• Meta signed a multi-year deal to use Qualcomm processors in its data centers, with Microsoft also named as a potential HBC customer.
• Qualcomm acquired Alphawave Semi in December, adding high-speed data center connectivity chips and a custom silicon design lab.
• Management projects $15 billion in AI infrastructure revenue by fiscal 2029 and a $1.7 trillion total addressable market by 2030.

Qualcomm (QCOM) stock has climbed 66% over the past three months as the chipmaker lays out an aggressive push into AI data centers, a market dominated by Nvidia (NVDA).

QUALCOMM Incorporated, QCOM

QCOM was trading at $189.36 at the time of writing, down 7.58% on the day, but still well above its 52-week low of $121.99. Its price-to-earnings ratio sits at just 21, compared to the tech sector average of 44.

The past week has been a busy one. At its investor day presentation, CEO Cristiano Amon made clear that Qualcomm is no longer content being a smartphone chip company.

The goal: make smartphone chips just one-third of total sales by 2029. Last fiscal year, non-smartphone chips already made up 28% of chip revenue.

The Acquisitions Doing the Heavy Lifting

In December, Qualcomm bought Alphawave Semi, picking up high-speed data center connectivity chips and a custom silicon design lab. One of Alphawave’s founders, Tony Pialis, is now Qualcomm’s executive vice president of data center tech. Those networking chips are already on sale, and two custom-chip customers are signed on and contributing to sales next fiscal year.

Then came the Modular deal. Qualcomm announced the acquisition of the AI software company in an all-stock deal valued at roughly $4 billion. Modular’s software can run any AI model across different hardware platforms. The deal also brings in Chris Lattner, Modular’s co-founder and CEO, who is well regarded in software development circles.

That Modular purchase matters because it gives Qualcomm a software layer — something Nvidia has long used as a competitive moat through its CUDA ecosystem.

New Chips, New Customers

Qualcomm unveiled its Dragonfly C1000 CPU at the investor day. Meta is the first confirmed data center customer for that chip, under a multi-year agreement.

It also introduced the HBC inference chip platform. Microsoft CEO Satya Nadella appeared in a video at the event, calling out HBC’s “high memory bandwidth and integrated compute” as unlocking improvements in cost and performance for AI infrastructure. Microsoft may be a customer, though details were limited.

The first HBC generation will be available for customer sampling in 2027. A second generation follows in 2028.

The strategic logic is straightforward. Nvidia built its data center dominance on four pillars: AI accelerator chips, CPUs, high-speed networking, and software. Qualcomm now has versions of all four in place or in development.

The AI inference market is where Qualcomm sees its opening. Inference — running AI models rather than training them — is becoming the larger workload as enterprises roll out AI agents. A recent study from Google, Microsoft, and top university researchers found that AI coding agents use roughly a thousand times more inference compute than humans doing the same task.

Qualcomm’s management estimates AI infrastructure revenue will exceed $15 billion by fiscal 2029, up from near zero today. The company also projects a total addressable market of $1.7 trillion by 2030, combining data center, edge, and other opportunities.

The HBC chip sampling begins in fiscal 2027, and Qualcomm’s full data center stack is expected to be fully ramped over the following two years.

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