Qualcomm stock rises on Tenstorrent talks, AI chip push

Qualcomm shares rose about 3% in premarket trading to $228.09, extending a roughly 68% gain over the past three months after reports the company is in talks to acquire AI chip startup Tenstorrent and as investors focused on its June 24 investor day on AI and data-center strategy.

The reported discussions value Tenstorrent at about $8 billion to $10 billion. Tenstorrent develops AI accelerators for model training and inference and markets its processors as an alternative to graphics processing units used in many AI systems. The potential deal could bring Qualcomm access to Tenstorrent chief executive Jim Keller, a chip architect who previously held engineering roles at AMD, Apple and Tesla.

Investors are awaiting the June 24 investor day for details on Qualcomm’s custom AI processors and its plan for data-center revenue. J.P. Morgan analyst Samik Chatterjee wrote that market participants expect targets presented at the event to exceed current expectations and outlined a possible path to more than $3 billion in data-center revenue by fiscal 2027 and as much as $35 billion by fiscal 2031. Chatterjee placed Qualcomm shares on Positive Catalyst Watch while maintaining a Neutral rating pending evidence of execution.

Qualcomm completed a $2.4 billion acquisition of Alphawave Semi last year, adding technology for faster inter-chip data transfer. Investors see further acquisitions as part of efforts to build capabilities for AI servers and networking equipment. Market attention is also on whether Qualcomm will announce a major customer for its custom data-center chips at the investor day.

The company’s AI efforts have coincided with investor focus on pressure in its smartphone business and rising competition in PC chips from rivals including Nvidia. On a valuation basis, Qualcomm trades at a little more than 20 times projected next-year earnings, while Arm Holdings trades at a significantly higher forward multiple.

Chief Executive Cristiano Amon has described more than 40 AI-enabled device designs in development, including smart jewelry, camera-equipped audio wearables, pins and watches. Amon described smart glasses as shipping in the “tens of millions” annually and said they could grow into the “hundreds of millions.” He added, “Those agents are going to be the new app.”

No transaction has been announced, and neither company has confirmed a deal. Investors will be watching the June 24 investor day for product road maps, customer disclosures and financial targets that could clarify how Qualcomm intends to scale its data-center business.