Qualcomm Stock Soars Over 20% as Company Enters AI Chip Race Against Nvidia and AMD

​Qualcomm (QCOM) soared over than 20% on Monday after the chipmaker announced a bold new plan to enter the data center AI market. The company introduced its AI200 and AI250 chips, along with full rack-scale server systems, signaling its most ambitious effort yet to compete directly with Nvidia and AMD in artificial intelligence hardware.

The new lineup is a major pivot for the company, best known for its reign in smartphone chips, as it looks to capture part of the booming demand for data center computing power driven by AI applications.

Qualcomm’s AI Push

The AI200, launching in 2026, will serve as both an individual AI accelerator and part of a full server rack system powered by a Qualcomm CPU. The follow-up AI250 chip, set for 2027, will feature ten times the memory bandwidth of the AI200, underscoring the company’s intent to build a lasting presence in the space. A third-generation platform is already planned for 2028 as part of an annual product cadence.

Unlike chips built for AI model training, Qualcomm’s products are optimized for inference, the process of running trained AI models to deliver real-time results. The company says this approach allows its hardware to deliver high performance with lower power consumption, addressing one of the biggest challenges facing data center operators today: cost and energy efficiency.

A Strategic Shift Beyond Smartphones

The launch is a significant strategic diversification for Qualcomm, whose smartphone and licensing businesses currently generate the majority of its $10 billion in quarterly revenue. By establishing itself in the data center segment, Qualcomm aims to reduce its dependence on mobile devices and tap into the explosive growth of AI infrastructure spending.

The company’s move also reflects lessons learned from its earlier, short-lived Centriq project in 2017, when Qualcomm first attempted to break into data center CPUs. This time, the focus is narrower, targeting specialized AI workloads rather than general-purpose computing—an area where efficiency and scalability may provide an edge.

Market Reaction

Investors reacted positively to the announcement, with Qualcomm climbing more than 20% in a single session. The surge reflects optimism that the company could carve out a niche in a market currently dominated by Nvidia’s H100 accelerators and AMD’s MI300 series. Still, Qualcomm faces growing competition. Tech giants like Microsoft, Amazon, and Google have been developing their own AI chips, and the barrier to entry in this space is high. Success will depend on real-world performance, early customer adoption, and the ability to scale production efficiently.

​What to Watch Next

• Customer engagements and pilot deployments. The company announced a major deal with Saudi-based HUMAIN for deployment of 200 MW of its AI racks starting in 2026. How quickly that scales and the terms of that deal will be important.
• Product benchmarks and adoption. Qualcomm claims its solutions can deliver high memory bandwidth (e.g., 768 GB cards) and lower power consumption. Verifying those claims will be important for credibility.
• Impact on Qualcomm’s broader business. The shift to data-center AI needs to scale sizable revenue beyond its mobile business. Investors will ask how margins, cap-ex and ecosystem investments change.
• Competitive responses. NVIDIA, AMD and others are unlikely to stand still. Pricing pressure, performance wars and customer commitments all matter.

Looking Ahead

Qualcomm’s entry into the AI data center market is one of the most significant strategic pivots in its history. The company now faces the challenge of executing on its roadmap, winning enterprise clients, and proving its technology can compete with entrenched leaders. If successful, Qualcomm could transform from a smartphone chipmaker into a diversified AI computing powerhouse. For investors, the coming year will be critical in determining whether this move represents the start of a new growth era—or another ambitious experiment in a fiercely competitive field.