Wall Street Is Raising The Ceiling On Qualcomm—Here's Why

Qualcomm (NASDAQ: QCOM ) is a business that many people thought they understood.

It made the chips inside Android phones.

It collected fees from phone makers who used its wireless technology.

That was all they knew about the business.

So when Apple decided to stop using Qualcomm’s parts and build its own.

This made a lot of investors nervy.

What else did Qualcomm have? Well, as it turns out, a lot.

Wall Street, all of a sudden, is now taking the firm much more seriously.

In just a few weeks, the company recorded some milestones.

It landed its biggest AI deal ever, broke records in its car business, and held a major event in New York where it laid out an entirely new vision for the future.

This led to bank after bank rushing to raise their price targets for their shares.

The Phone Business Was Always Plan A.

Now There’s a Plan B, C, and D.

Qualcomm actually never stopped making phone chips.

Its Snapdragon processors still power most Android smartphones.

Meanwhile, in the last couple of years, the company has been building businesses in other industries.

This includes cars, laptops, and factory equipment.

The most recent, eye-catching one, AI data centers.

The whole point was not to be dependent on just one business.

This is because the smartphone sales are not growing as the way it should, and one big customer leaving (like the way Apple did) can hurt the business badly.

Now, those new businesses are doing well.

In the most recent quarter, Qualcomm made $10.6 billion in total revenue.

The firm also made $1.33 billion just from selling chips to automakers.

And this was 38% higher than the same period last year.

This is thanks to Qualcomm’s chips, which are being built into modern cars to power things like navigation, driver assistance, in-car entertainment, and connectivity.

Its partnership with Stellantis, the company manufacturing Jeep, Ram, and Chrysler, is a key part of why the numbers are climbing.

The TikTok Deal That Shocked the Market Major news came in recently for Qualcomm.

ByteDance, the Chinese company that owns TikTok, agreed to buy millions of Qualcomm’s custom-made AI chips to power its data centers.

As a result, the stock shot up by 12% in a single day.

ByteDance wasn’t a small customer.

The company literally runs some of the most-used apps in the world and needs enough computing power to do it.

Having them sign on was so important for Qualcomm.

It told the industry that the company now has a major hold in AI data centers.

The Big New York Event That Changed Everything Qualcomm’s Investor Day on June 24 in New York was also defining for the company.

The firm’s CEO, Cristiano Amon, came in with numbers that nobody expected.

The company said that by 2029, revenue from every other business apart from phones would hit $40 billion.