The stock has shed roughly 27% since its May peak, and the market is showing little appetite for promises alone. At €162.20, Qualcomm shares managed only a fractional gain on the day — a tepid reaction to a deal that catapults the U.S. chipmaker deeper into the artificial intelligence supply chain.
ByteDance, the Chinese social-media giant behind TikTok, is building a custom central processing unit for AI workloads and has tapped Qualcomm as a development partner. The internet company wants to reduce reliance on standard processors as its internal demand for compute power surges, driven by its own AI chatbots and video-generation tools. Design work is expected to be completed by early 2027, with mass production slated for the second half of that year. Beyond chip design, Qualcomm is also assisting with securing manufacturing capacity — a move that stretches the company well beyond its traditional smartphone business and positions it as a supplier of tailored AI hardware.
Neither side has disclosed financial terms, chip volumes, or a specific revenue model. Qualcomm could earn fees from design services, licensing, or silicon sales. For now, the deal is a strategic signal: the company is proving its relevance outside mobile devices, even if a formal contract with measurable economic targets has yet to be signed.
Analysts have taken notice of Qualcomm’s broader ambitions. After the company’s investor day in late June, Mizuho, Barclays, Bernstein and Citi all raised their price targets. Benchmark was the most bullish, setting a $300 target and a buy rating, praising the push into AI infrastructure. Yet most experts held firm with neutral ratings, and Barclays described Qualcomm as a “show-me” story in a fiercely competitive market. The disparity between lofty projections and market skepticism is stark.
Should investors sell immediately? Or is it worth buying Qualcomm?
The path ahead is crowded. Bernstein recently compared Qualcomm directly with Nvidia in the emerging market for humanoid robots and concluded that Nvidia’s broader software ecosystem gives it the edge. Developers of advanced robots, the analysts said, gravitate toward Nvidia’s platform. Bernstein stuck with a hold on Qualcomm and a $235 target, while recommending Nvidia as a buy.
Automotive remains a bright spot. Qualcomm aims to generate around $10 billion in revenue from that segment by fiscal 2029, and its order book has swelled to over $65 billion. Mizuho projects that handset revenue could fall to less than a third of total sales over time. But near-term headwinds are persistent: the smartphone market is sluggish, Apple is developing its own modems and threatens to walk away as a major customer, and the server business carries open questions. Meta may tap Qualcomm as a CPU supplier but could split the order with AMD.
The next catalyst is just weeks away. Qualcomm reports fiscal third-quarter results in July, providing the first concrete data points since the strategic pivot was laid out. Chart watchers are eyeing the 200-day moving average near €145.37 as a key support line — a level that has so far held, but one that could be tested if the earnings report fails to reassure investors.
For now, the ByteDance partnership gives Qualcomm a foothold in custom AI infrastructure, but the market wants proof. With analyst upgrades failing to lift the stock and a string of competitive and customer risks hanging overhead, the coming earnings call may determine whether long-term vision can finally translate into short-term conviction.
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