Qualcomm shares soared to a record high on Monday, rising as much as 9.3% before closing up 6.8% at $233.98, as the broader semiconductor rally extended beyond Nvidia and memory stocks. The surge reflects a growing investor appetite for Qualcomm's evolving narrative as a data center chip contender, rather than just a smartphone component supplier.
The San Diego-based company reported fiscal second-quarter revenue of $10.6 billion and non-GAAP earnings of $2.65 per share. It also disclosed $5.4 billion in share repurchases completed in the first half of fiscal 2026 and authorized a new $20 billion buyback program. These figures, combined with the data center push, have prompted a strategic reassessment on Wall Street.
Chief Executive Cristiano Amon reiterated that shipments to a major cloud customer remain on track for later this year, marking a key milestone in Qualcomm's data center ambitions. The company is developing CPUs, inference accelerators, and application-specific integrated circuits (ASICs) for AI workloads. "They're building from a small base," said Bob O'Donnell, president and chief analyst at TECHnalysis Research, but the portfolio is expanding.
The shift in investor sentiment was underscored by a recent analyst upgrade. On May 8, Daiwa Securities' Louis Miscioscia raised Qualcomm to Outperform from Neutral, boosting his price target to $225 from $140. He advised looking past the cautious guidance, citing revenue growth potential, valuation, and the upcoming investor day focusing on data center CPUs and edge AI.
Despite the rally, challenges remain. Qualcomm's current-quarter revenue guidance of $9.2 billion to $10 billion fell short of the $10.27 billion consensus, and adjusted EPS projections of $2.10 to $2.30 missed the $2.45 estimate, according to LSEG data. Additionally, the company faces the loss of Apple as a modem-chip customer when their licensing deal ends in 2027.
J.P. Morgan analysts noted ongoing headwinds in the smartphone sector, including memory shortages and rising prices. However, Qualcomm continues to invest in handsets, launching the Snapdragon 6 Gen 5 and Snapdragon 4 Gen 5 mobile platforms last week, with devices from Honor, OPPO, realme, and REDMI expected in the second half of 2026.
CEO Amon expressed confidence that the smartphone market has bottomed, telling Reuters, "We can now call the bottom," based on signals from licensing partners about phone-maker plans. This optimism, combined with the data center push and buyback program, is fueling the stock's momentum.
The broader market context is supportive, with the S&P 500 and Nasdaq hitting fresh intraday highs, buoyed by chip names like Nvidia and Micron. Qualcomm's record high reflects a pivotal moment as investors weigh the company's ability to diversify beyond smartphones into high-growth AI infrastructure.
