Qualcomm Stock Soars as Company Targets Nvidia’s AI Chip Dominance

Qualcomm Inc. shares rose to their highest price in 15 months after the company unveiled chips and computers for the lucrative AI data center market, aiming to challenge Nvidia in the fastest-growing part of the industry.

The company’s new AI200 lineup will start shipping next year, Qualcomm said on Monday. The first customer will be Saudi Arabia’s AI startup Humain, which plans to deploy 200 megawatts’ worth of computing systems based on the chips starting in 2026.

Qualcomm is trying to break into the market for AI accelerators, which are used to create and run artificial intelligence models.

It’s an area that’s already transformed the semiconductor industry, with hundreds of billions of dollars being spent on data centers to power AI software and services. The rapid growth has turned market leader Nvidia into the world’s most valuable company.

Qualcomm, the largest maker of smartphone processors, looks to gain a foothold in this market with a different approach. It argues that new memory-related capabilities and the power efficiency of Qualcomm’s designs — that owe their roots to mobile device technology — will attract customers, despite its relatively late entry.

The shares climbed 11% to $187.68, their biggest single-day jump since April and the highest price since July 2024.

Qualcomm’s AI200 product will be offered in a range of forms: a standalone component, cards that can be added into existing machines or as part of a full rack of servers provided by Qualcomm. Those debut products will be followed by the AI250 in 2027, the San Diego company said.

If supplied only as a chip, the component could work inside gear that’s based on processors from Nvidia or other rivals. As a full server, it will compete with offerings from those chipmakers.

The new offerings are built around a neural processing unit, a type of chip that debuted in smartphones and is designed to speed up AI-related workloads without killing battery life. That capability has been developed further through Qualcomm’s move into laptop chips and has now been scaled up for use in the most powerful computers.

Qualcomm has been “quiet in this space, taking its time and building its strength,” according to Durga Malladi, a company senior vice president. Qualcomm is in talks with all of the biggest buyers of such chips on deploying server racks based on its hardware, he said.

Nvidia, which remains atop the AI computing world, is on target to generate more than $180 billion in revenue from its data center unit this year, more than any other chipmaker – including Qualcomm – will get in total, according to estimates.

Qualcomm’s new chips will offer an unprecedented amount of memory, according to Malladi. They’ll have as many as 768 gigabytes of low-power dynamic random access memory.

Memory access speed and capacity are crucial to the rate at which the chips can make sense of the mountain of data handled in AI work.

The new chips and computers are aimed at inference work, the computing behind running AI services once the large language models that underpin the software have been trained.

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