Qualcomm ups its game in AI, sending its stock to a 15-month high

By Britney Nguyen

The company is launching chip-based AI accelerator cards for AI inference and data center racks, and is counting Saudi Arabian AI firm Humain as its first customer

Qualcomm's stock is up 12% in Monday action.

Qualcomm Inc. isn't new to the artificial-intelligence game, but its latest moves are captivating investors. The chip maker announced two chips that will feed into the multibillion-dollar data-center build-out.

The company, which mostly focuses on chips for mobile devices, said Monday it is launching its AI200 and AI250 chip-based accelerator cards and data-center racks as part of a road map to release multiple generations of AI inference solutions for data centers on an annual cadence. Inference is the process of running AI models after training.

Qualcomm's (QCOM) AI200, which is expected to be commercially available starting next year, "introduces a purpose-built rack-level AI inference solution" that is designed to lower total cost of ownership while optimizing performance for large-language models and multimodal models, the company said. The chip-based accelerator card has higher memory capacity, which will allow companies to scale up AI inferencing.

The following AI250 is slated to roll out in 2027, and will include "an innovative memory architecture based on near-memory computing," Qualcomm said, which will boost AI inference efficiency and performance "by delivering greater than 10x higher effective memory bandwidth," and by lowering power consumption.

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The stock closed up 11.09% on Monday at $187.68, reaching its highest close since July 23, 2024 when it finished at $193.35, according to Dow Jones Market Data. Qualcomm's stock is up 22.17% so far this year, putting it on pace for its best year since 2023, the data showed.

The rack solutions for both AI200 and AI250 include direct liquid cooling; the Peripheral Component Interconnect Express, or PCIe, standard for high-speed interface connection for scaling up; Ethernet for scaling out; and "confidential computing" to support running AI models securely, Qualcomm said.

Additionally, Qualcomm said Saudi Arabian AI company Humain will be the first customer to deploy its AI200 and AI250 rack solutions starting next year, with a goal of 200 megawatts' worth of systems.

Bernstein's Stacy Rasgon said in a Monday note that Qualcomm is not new to selling AI accelerators, having announced its first generation in 2019.

"These new parts appear to be next-gen, and are the first to bring a rack-scale architecture to the company's offering," Rasgon said about the AI accelerator cards and racks. "For whatever reason the company's earlier efforts drew little to no attention but today's announcement appears to be garnering more," he added, pointing to the stock's move, which he said is "significantly outperforming even on a strong market day."

Still, it's currently difficult to gauge the value proposition and opportunity for Qualcomm's new AI inference offerings, according to the Bernstein team.

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With rack-level power consumption of 160 kilowatts, Humain's plan for 200 megawatts of Qualcomm's systems translates to about 1,250 racks, Rasgon said, noting that it's not clear how many AI200 cards will be in each rack, or how much each rack costs.

Rasgon said that Qualcomm's 200-megawatt deal with Humain "is dwarfed by many of the other deals" such as those between AI startup OpenAI with Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD), "but for now we'll take it." He added that he thinks Qualcomm Chief Executive Cristiano Amon "would take a call from Altman if the opportunity were to arise," referring to OpenAI Chief Executive Sam Altman.

Qualcomm's new data-center offerings put it in closer competition with Nvidia and AMD, which are facing increasing threats from custom chips developed by Broadcom Inc. (AVGO) in partnership with tech giants such as Alphabet Inc.'s (GOOGL) (GOOG) Google. Broadcom is also partnering with OpenAI to design and deploy 10 gigawatts of custom silicon.

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-Britney Nguyen

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10-27-25 1635ET