Can Completion of Qualcomm's Alphawave Buyout Deal Propel Its Shares?

Qualcomm Incorporated QCOM has completed the acquisition of U.K.-based chip firm Alphawave Semi for an enterprise value of approximately $2.4 billion. The buyout offers Qualcomm an opportunity to expand its presence in high-growth applications, including data centers, artificial intelligence (AI), data networking and data storage. 

With advanced technology solutions that are complementary to power-efficient CPU and NPU cores, Alphawave Semi delivers connectivity products and chiplets that drive faster, more reliable data transfer with higher performance and lower power consumption for 5G wireless, AI and data center applications. The acquisition, therefore, provides the firepower to enable Qualcomm to be the driving force of the next wave of AI innovation. 

Over the past few quarters, Qualcomm has aimed to expand its footprint in AI chips through focused R&D initiatives and strategic acquisitions. In April, the company acquired MovianAI, the former generative AI division of VinAI, a prominent Vietnam-based AI firm. The transaction provided Qualcomm access to VinAI’s comprehensive expertise in generative AI, machine learning, computer vision and natural language processing, significantly accelerating its fundamental AI research. The integration of VinAI’s portfolio with Qualcomm’s extensive R&D expertise facilitated the development of state-of-the-art AI-driven solutions for a wide range of industries, including smartphones, PCs, software-defined vehicles and more.

Other Tech Firms Focusing on AI Chips

Advanced Micro Devices, Inc. AMD has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focused company from a pure-bred consumer-PC chip provider. The latest MI300 series accelerator family strengthens its competitive position in the generative AI space. The accelerator from Advanced Micro is based on AMD CDNA 3 accelerator architecture. It supports up to 192 GB of HBM3 memory, enabling efficient running of large language model training (up to 80 billion parameters) and inference for generative AI workloads. Advanced Micro is also benefiting from strong enterprise adoption and expanded cloud deployments. 

Intel Corporation INTC has launched the Intel Core Ultra (Series 2) processors engineered to redefine mobile computing for a wide range of use cases, such as gaming, content creation, IT applications and various other businesses. This state-of-the-art lineup brings significant advancements in AI capabilities, improved performance and efficiency, setting new standards for AI computing. Intel has also introduced a new lineup of leading-edge processors to support AI workloads for edge devices. The Intel Core Ultra processors offer greater scalability, energy efficiency and impressive performance at the edge for a diverse range of use cases such as industrial IoT, autonomous vehicles and more.

QCOM’s Price Performance, Valuation and Estimates

Qualcomm shares have gained 10.7% over the past year compared with the industry’s growth of 35.3%.

Going by the price/earnings ratio, the company's shares currently trade at 14.3 forward earnings, lower than 33.8 for the industry and the stock’s mean of 16.89. 

Earnings estimates for fiscal 2026 and fiscal 2027 have increased 2% to $12.15 per share and 3.4% to $12.60, respectively, over the past 60 days.

Qualcomm currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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