Qualcomm Stock Jumps 20% as New AI Chips Set to Rival Nvidia and AMD
Tech firm eyes data center AI sector with AI200 and AI250 chip launches, putting pressure on Nvidia, AMD and infrastructure players.
Shares of Qualcomm (NASDAQ: QCOM) surged as much as 20% today after the company unveiled its next-generation AI accelerator chips and rack-scale systems, geared toward the burgeoning data-center inference market. The firm’s push places it squarely in competition with established players Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD), and could reshape the semiconductor landscape for AI infrastructure.
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Qualcomm Enters Data-Center AI Market
Qualcomm announced two new products: the AI200, slated for commercial availability in 2026, and the AI250, expected in 2027. These are not just standalone chips but part of a full rack-scale system offering.
The company emphasized that its solutions target AI inference workloads, running trained models, rather than the initial model training phase.
Qualcomm said the AI200 will support up to 768 GB of LPDDR memory per card, and the AI250 will offer a near-memory-compute architecture with more than 10x higher effective memory bandwidth and lower power consumption.
Durga Malladi, SVP & GM of Technology Planning, Edge Solutions & Data Center at Qualcomm, commented:
“With Qualcomm AI200 and AI250, we’re redefining what’s possible for rack-scale AI inference. These innovative new AI infrastructure solutions empower customers to deploy generative AI at unprecedented TCO, while maintaining the flexibility and security modern data centers demand.”
Investors Weigh Challenges Ahead
While the market cheered the announcement, Qualcomm could face several hurdles ahead. The data-center inference market is less mature than training infrastructure, margins could be thinner, and the transition by large cloud providers to new architectures can be slow due to switching costs and ecosystem lock-in.
Shares of AMD rose 2.7% on the same day, indicating that investors are still comfortable with AMD’s existing foothold despite the new competition. Intel (NASDAQ: INTC) is also stepping up AI infrastructure efforts, which could carve the market into multiple competitive segments rather than a simple duopoly.
Qualcomm also announced today a major deployment deal with Saudi-backed AI firm HUMAIN, which will begin installing Qualcomm AI200 and AI250 rack solutions starting in 2026 across up to 200 megawatts of capacity.
Tareq Amin, Chief Executive Officer at HUMAIN, stated:
“With Qualcomm’s world-class AI infrastructure solutions, we’re shaping the foundation of the Kingdom’s AI future. This collaboration unites HUMAIN’s deep regional insight and unique full AI stack capabilities with Qualcomm’s unmatched semiconductor technology and product leadership. Together, we will enable Saudi Arabia to lead the next wave of global AI and semiconductors innovation.”
Analyst Backs Qualcomm Move
Rosenblatt Securities reiterated its Buy rating on Qualcomm with a $225 price target after the company announced its 200-megawatt AI infrastructure deployment with Saudi Arabia’s HUMAIN. The firm said the project marks a key step in Qualcomm’s push beyond smartphones and licensing.
Rosenblatt estimates the HUMAIN deal could generate about $2 billion in revenue starting in 2026. The deployment follows a larger 500-megawatt agreement HUMAIN signed earlier with AMD, highlighting growing demand for AI inference systems.
“The HUMAIN deployment represents a significant step into a new growth vector for Qualcomm in AI inference data centers,” Rosenblatt said in its note, adding that it aligns with management’s strategy to expand into new end markets while maintaining smartphone leadership.
The analyst said the partnership strengthens Qualcomm’s credibility in the data-center market dominated by Nvidia and AMD. Cloud leaders Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), and Microsoft (NASDAQ: MSFT) are also developing in-house AI chips, intensifying competition across the sector.
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QCOM Stock Surges
Qualcomm shares climbed as much as 21.9% today, reaching an intraday high of $205.95 before closing the day at $187.68, up 11.1%.
The reaction suggests investors embrace the narrative of Qualcomm gaining a credible data-center AI business, but the real test lies in customer wins, margin expansion, and execution.
Joe Tigay, portfolio manager of the Rational Equity Armor Fund, noted:
“Qualcomm’s entry and major deal in Saudi Arabia prove the ecosystem is fragmenting because no single company can meet the global, decentralized need for high-efficiency AI compute.”
For Qualcomm, the stakes include reducing reliance on its smartphone-modem business and finding new growth vectors. The company doesn’t yet report data-center revenues, and building a major presence in AI inference will take years.
Focus Turns to Adoption and Margins
Investors will monitor these key developments:
- Customer adoption: How quickly major cloud and enterprise hyperscalers choose Qualcomm’s platforms over incumbent GPU vendors.
- Pricing and total cost of ownership (TCO): Qualcomm is pitching lower power consumption and cost of ownership as a differentiator.
- Ecosystem and software stack: Compatibility with leading AI frameworks and ease of model deployment will influence enterprise uptake.
- Competitive responses: Nvidia, AMD, and Intel will likely accelerate their own roadmaps in response.
- Margin impact: While the revenue opportunity is large, competitive pressure could compress margins.
In the broader semiconductor universe, stakeholders ranging from Microsoft to Amazon will continue evolving their own in-house capabilities, which could further fragment the partner landscape.
Qualcomm’s bold announcement signals a clear pivot into the AI infrastructure domain, one that places it in direct contention with heavyweights like Nvidia and AMD. The bullish stock move reflects optimism, but tangible results, customer breadth, revenue momentum, and cost savings will determine whether Qualcomm can translate this strategic ambition into long-term market traction.
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