Qualcomm shares rose over 10% to a more than two-year high on Thursday as the smartphone chipmaker projected an AI-fueled rebound in demand, particularly in China, following a years-long downturn.
Qualcomm (QCOM.O), which opened new tab shares, jumped almost 10% to a more than two-year high on Thursday after the smartphone-focused chipmaker suggested an AI-fueled rebound in demand, particularly in China, after a years-long decline.
Sales to Chinese smartphone makers increased by 40% in the first half of the fiscal year, the business said on Wednesday, as buyers prefer higher-priced smartphones that can support AI chatbots.
“Chinese vendors, who traditionally relied more on MediaTek, are going to start leveraging Qualcomm’s high-end chips more as they push hard into the AI agenda,” Nabila Popal, an analyst at IDC, said.
“They further represent an upside for Qualcomm because the majority of the rebound is going to be led by Chinese OEMs this year, after a rough last two years.”.
Qualcomm estimated third-quarter sales that were higher than expected, citing gains from its IoT (Internet of Things) and car sectors.
The business, the largest producer of smartphone chips, was on track to increase its market value by more than $18 billion if the gains held throughout the session.
The Philadelphia Semiconductor Index (.SOX), which opens a new tab, climbed 1.4% after falling 3.5% on Wednesday due to disappointing earnings from semiconductor makers Advanced Micro Devices (AMD.O.) and Super Micro Computer (SMCI.O.).
“We’re optimistic that numbers can be driven higher, given last year’s muted Android cycle and the likelihood of IoT (internet of things) improvement as inventory normalizes,” according to analysts at Wolfe Research.
LSEG data shows that at least 14 analysts boosted their price estimates for Qualcomm.
Qualcomm’s shares rose 9.7% to $180.31 in early trading, adding to their 13.5% gain this year.
Apple shares rose 1.2% as the company prepares to publish profits after the market closes on Thursday.
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