Qualcomm's automotive revenue hits $1.3B on AI pivot

What happened

Qualcomm's stock has cooled after a 59% run-up over three months, now trading about 18% below its 52-week high. The company is pursuing what it calls "agentic AI," expanding into automotive (which delivered a record quarter with revenues of $1.3 billion（約2100億円）, representing 38% year-over-year growth), data centers, robotics, and PCs, while its core handset business faces pressure from Chinese phone makers reducing build plans.

Why it matters

Investors are paying a premium for Qualcomm's revenue—a price-to-sales multiple of 5.3 versus the market's 3.2—betting that diversification into higher-growth areas will make that revenue more valuable over time. However, this growth narrative is unfolding while the company's largest business segment navigates a cyclical downturn; management expects Chinese smartphone revenue to reach bottom in the third quarter, and the company also faces long-term headwinds from reduced business from Apple.

What to watch

Qualcomm has entered the custom silicon space with a leading hyperscaler (large cloud provider), with shipments expected late this year—a move that could open a significant new growth avenue. The company's investor day will reveal details on its data center plans, a key pillar of the growth story that remains largely undefined; whether China's smartphone market recovers as management expects and how compelling those data center plans prove will likely determine whether the stock can weather current handset headwinds.