Qualcomm's stock gains as an AI opportunity emerges

By Britney Nguyen

The company is reportedly developing chips for OpenAI

Qualcomm's stock rose 1% on Monday.

Qualcomm's stock finally seems to have an artificial-intelligence halo.

Investors are cheering in the wake of an article on X from TF International Securities analyst Ming-Chi Kuo, who wrote that the telecom company (QCOM) is working with OpenAI to develop smartphone chips. Taiwanese chip maker MediaTek will also develop processors for OpenAI, while Chinese electronics manufacturer Luxshare Precision Industry will work exclusively with the ChatGPT maker on system co-design and as a manufacturing partner, Kuo said, citing his industry research.

As co-development partners, Kuo said both Qualcomm and MediaTek will likely "benefit from long-term replacement demand," referring to users choosing new devices over modern smartphones. In the near-term, Kuo added that smartphones "remain the largest-scale device category."

Neither Qualcomm nor OpenAI immediately responded to requests for comment on the potential partnership.

See more: Google debuts two custom chips in latest bid to challenge Nvidia's dominance

The revenue contribution of one AI chip is about the same as it would be for 30 to 40 smartphone chips for agentic AI, Kuo said, using MediaTek's reported custom inference chip for Google (GOOGL) (GOOG) as a comparison. Therefore, if OpenAI is planning to compete in the global high-end market, which ships between 300 million and 400 million smartphone units per year, "the replacement cycle could become another major growth driver," he said.

Qualcomm's stock surged about 6.5% shortly after the market opened on Monday, though it lost most of those gains and ended the day up just 1%. Shares have fallen almost 14% so far this year as the broader consumer-electronics market struggles with memory-chip constraints. With Qualcomm specifically, investors have also worried that the company was losing business with modem customers Apple (AAPL) and Samsung Electronics (KR:005930).

The company has also been viewed as an AI laggard despite having been in the game for AI accelerators since 2019.

In October, the company announced two chip-based accelerator cards and data-center racks as part of a plan to release multiple generations of AI inference offerings for data centers on an annual cadence.

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Kuo said OpenAI is aiming to provide an "AI agent service," which would complete tasks and address other users' needs, rather than only providing apps to do so. In his view, "fully controlling both the operating system and hardware" would allow OpenAI to deliver this type of product. Additionally, Kuo said smartphones are the only device that can gather a person's full activity, "which is the most important input for real-time AI agent inference."

The specifications of the device and components suppliers are expected to be finalized later this year or in the first quarter of 2027, according to Kuo, and mass production is slated to start in 2028.

-Britney Nguyen

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04-27-26 1723ET