Qualcomm Poised to Outperform Nvidia, AMD, Broadcom in AI Boom

Qualcomm has lagged behind Nvidia, AMD, and Broadcom, with its stock rising only 63% over three years compared to their gains of over 300%. The company's heavy reliance on the smartphone market, where growth is limited, has held back its financial performance. Now, Qualcomm is pivoting to AI data center hardware, designing server CPUs, AI accelerators, and rack-scale systems to tap into demand for agentic AI and inference applications.

Recent partnerships with Meta Platforms and Amazon indicate that Qualcomm's efforts are gaining traction. Meta will use Dragonfly CPUs in next-generation AI servers, and Amazon will collaborate on custom AI chips and optical components. These deals support Qualcomm's projection that data center revenue will climb from virtually nothing to $5 billion in fiscal 2027 and $15 billion in fiscal 2029, potentially boosting overall growth.

The key test for Qualcomm is whether it can secure more hyperscaler clients beyond Meta and Amazon. If it does, growth could exceed current estimates. The company trades at under 17 times forward earnings, cheaper than its peers, and if earnings grow around 25% in fiscal 2028, the stock could reach $390—124% above its current price. That scenario assumes the market rewards Qualcomm with a higher valuation, similar to the Nasdaq-100's multiple of 34.