Qualcomm Inc. (NASDAQ:QCOM) is making its boldest move yet beyond smartphones, unveiling new AI accelerator chips that mark its entry into the fast-growing data center market, a pivotal step to diversify revenue and challenge Nvidia's dominance in the AI computing race.
Bank of America reiterated its Buy rating on Qualcomm with a $200 price forecast, citing the chipmaker's newly announced AI accelerator chips as a meaningful step toward diversifying beyond its core smartphone market.
Qualcomm's stock jumped 11% on the news and is up 22% year-to-date, still trailing semiconductor peers NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD), which have surged 43% and 115%, respectively.
Also Read: Qualcomm Unveils New AI Chips To Compete In Data Center Race
Bank of America analysts, led by Tal Liani, said the expansion into the AI data center market is strategically important. However, it noted that near-term upside in 2026 remains limited due to a single deal and the need for the company to prove its technical execution.
Diversification Strategy and Product Focus
The analysts highlighted Qualcomm's ongoing diversification strategy, noting that its entry into the data center market builds on momentum in the automotive and IoT segments.
The firm pointed to Qualcomm's acquisition of Alphawave, which enhances its high-speed connectivity and compute capabilities. The latest announcement, focused on NPUs and adjacent components, targets the lower end of the market without high-bandwidth memory (HBM) features.
Significant Revenue Potential in AI Accelerator Segment
Semiconductor analyst Vivek Arya estimates that the non-GPU AI accelerator segment could grow to about $114 billion by 2030, suggesting that even a 5% market share could contribute $5.5 billion in revenue, about 14% of Qualcomm's QCT sales, though the company remains in early development stages.
Valuation Gap vs. Data Center Peers
The stock trades at about 14.5x 2026E earnings, roughly in line with consumer-focused semiconductor peers such as Qorvo, Inc. (NASDAQ:QRVO) and Skyworks Solutions, Inc. (NASDAQ:SWKS) but well below data center peers including Nvidia (32x), AMD (43x), Arm Holdings plc (NASDAQ:ARM) (88x), and Marvell Technology, Inc. (NASDAQ:MRVL) (27x).
Bank of America said the stock's underperformance stems from high exposure to Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (OTC:SSNLF), as well as weakness in the smartphone market.
The bank noted that the $200 price forecast is based on a valuation of approximately 15x its 2026E P/E, in line with the average multiple for smartphone semiconductor peers.
Price Action: QCOM shares were trading higher by 0.30% to $181.58 premarket at last check Wednesday.
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