Qualcomm targets $261 on AI data center push, 52.7% upside

Qualcomm has undergone a dramatic round-trip in the past five months. In March, shares hit a 52-week low near $121.54; by June 24, following the Investor Day, they rallied to a high of $258.96 after management announced it had doubled its 2029 non-handset revenue target to $40 billion（約6.4兆円） and set a $15 billion（約2.4兆円） AI data center sales goal. That momentum has since faded, with the stock trading at $170.61 as of July 16 and down 20.3% over the past month, leaving it roughly flat year-to-date at +0.77%.

Q2 FY26 results underscored a company in transition. Total revenue came in at $10.60 billion（約1.7兆円）, meeting expectations, while non-GAAP earnings-per-share reached $2.65, beating consensus by 3.67%. Automotive was a standout, hitting a record $1.326 billion（約2100億円）—up 38% year-over-year—while handsets declined 13% due to memory supply constraints and Chinese original equipment manufacturer channel drawdowns. Looking ahead, the company guided Q3 automotive to 50% year-over-year growth and signaled the segment will exit FY26 at a $6 billion（約9600億円）+ run rate. Polymarket traders assign an 87% probability that Qualcomm beats its next earnings report scheduled for July 29.

The investment case rests on Qualcomm emerging as a credible third player in hyperscaler custom silicon—specialized processors designed for large cloud providers' AI workloads. CEO Cristiano Amon confirmed that a custom silicon engagement with a leading hyperscaler is on track for initial shipments in the December quarter. Broadcom's current performance provides a roadmap: the company already books $11 billion（約1.8兆円） per quarter in AI chips, up 143% year-over-year, a trajectory Qualcomm aims to replicate. 24/7 Wall St. sets a $260.52 price target, implying 52.7% upside over the next 12 months, with a 90% confidence buy rating. The bull-case scenario extends to $269.05 if the data center ramp executes cleanly and China handsets bottom on schedule. The analyst consensus target, by contrast, sits at $222.73. Risks include customer concentration—Qualcomm expects only 20% share of Apple phones launching in fall 2026 with no relationship beyond that—and continued handset weakness, with Q3 FY26 guidance calling for revenue to step down to $9.2B–$10B.

Qualcomm's investment thesis hinges on a structural shift in the company's revenue mix away from volatile handsets toward higher-margin, more resilient segments. The June 24 Investor Day marked a turning point: management doubled its 2029 non-handset revenue target to $40 billion（約6.4兆円） and explicitly set a $15 billion（約2.4兆円） AI data center sales goal. This signals an intentional pivot to compete in hyperscaler custom silicon—the same market where Broadcom already generates $11 billion（約1.8兆円） per quarter in AI chips, up 143% year-over-year. That benchmark matters: if Qualcomm executes its data center ramp as planned, with initial shipments in December, the company could achieve a similar rerating.

The near-term fundamentals support the bull case. Automotive revenue surged to a record $1.326 billion（約2100億円） in Q2 FY26, up 38% year-over-year, and Q3 guidance calls for 50% year-over-year growth, exiting FY26 at a $6 billion（約9600億円）+ run rate. Q2 earnings also beat expectations on the bottom line by 3.67% (non-GAAP EPS of $2.65 vs. consensus). However, handset weakness persists: revenue fell 13% year-over-year in Q2 due to memory supply constraints and Chinese OEM channel drawdowns, and Q3 guidance expects a step-down to $9.2B–$10B in revenue. The analyst community's consensus target of $222.73 trails 24/7 Wall St.'s bull-case $269.05 scenario, which assumes the data center ramp lands cleanly and China handsets bottom on schedule.

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