Qualcomm up 40% in five years still isn't cheap next to AI chip peers

Qualcomm is one of the world's largest mobile chipmakers, but its AI-oriented chips have not drawn the attention that Nvidia's data center GPUs or Broadcom's custom AI accelerators for hyperscalers have. That difference shows up in the five-year stock performance: Qualcomm's 40% gain against Nvidia's roughly 1,000% and Broadcom's 630%.

Three reasons Qualcomm still does not look cheap next to those AI leaders. Its main AI strategy is edge AI, meaning on-device processing added to its existing Snapdragon chips, which power mobile devices, wearables, vehicles, and PCs. These chips primarily target budget-constrained consumer device manufacturers, which limits pricing power and the total addressable market.

The other reasons concern growth and valuation. Analysts expect Qualcomm's revenue and EPS to grow at CAGRs of 6% and 27% from fiscal 2025 to fiscal 2028, which pales next to Nvidia's expected 61% revenue and EPS CAGRs and Broadcom's 62% revenue and 80% EPS CAGRs. Qualcomm is also still more expensive than Nvidia and Broadcom. It is trying to move into the data center market with its Cloud AI 100 and next-gen AI accelerators for inference tasks, but it could struggle to stand out in that crowded market.