1 Incredible Reason to Buy Qualcomm Stock Right Now

The one reason Qualcomm still looks interesting

The main reason to buy Qualcomm now is the gap between what investors seem to accept today and what they may have to value later: near-term smartphone pain and margin pressure, but still only a modest expectation for AI data-center revenue. If that balance shifts even slightly in management's favor, the stock already has proof of how responsive investors can be.

The earlier 13% reversal showed where the upside catalyst lives

Earlier this year, Qualcomm reported a second-quarter beat but weaker third-quarter guidance, and the shares initially sank after the chipmaker reported second-quarter earnings. Then management said it would begin shipping data-center chips to "a large hyperscaler" within the calendar year, and the stock jumped more than 13%. That swing suggested where the real upside catalyst sits: not in a perfect smartphone recovery, but in growing credibility around AI infrastructure.

Bank of America has projected $2 billion to $5 billion in annual data-center revenue by fiscal 2027-2028. At roughly 14.31 times forward earnings, Qualcomm is not priced like a fully established AI infrastructure winner, but it may not stay cheap for long if that business starts to look more concrete.

Why AI can matter more if the smartphone base stabilizes

The rerating depends on phones funding the next leg

The key question is no longer whether Qualcomm has an AI story. It is whether investors begin to treat that story as a real revenue stream rather than a corporate sidebar.

Qualcomm is unlikely to rerate on AI alone if the handset business keeps weakening. That is why the premarket move mattered: shares jumped 10.3% before the bell after management linked two things investors care about at once - a possible smartphone rebound and tangible data-center opportunity. In simple terms, a steadier phone business protects present cash flow, while data-center success opens a higher-growth avenue the market can value more generously.

If handset demand stabilizes, Qualcomm does not need a heroic phone comeback to impress investors. It needs enough stability to preserve market share and fund other bets. At that point, the debate shifts from "Is the smartphone cycle still falling?" to "How large can the non-phone business become?"

China matters because it can be an early warning sign

China can also serve as an early read on whether the smartphone cycle is bottoming. Qualcomm shares previously climbed about 10% to a more than two-year high after management signaled improving demand, especially in China. If that rebound holds, it weakens the bearish view that the handset slump is doing all the damage.

Still, investors should keep the comparison straight. This is early commercialization proof, not a finished story. Qualcomm is expected to begin shipping data-center processors and other AI chips by year-end, but that ramp will happen in a market still dominated by Nvidia, Cerebras, and custom chips from larger platform players.

The bear case is real, and it is near term

Margin pressure is already visible in the numbers

That AI upside only works if investors continue to weight long-term potential more heavily than the current profit squeeze.

The near-term hit is not abstract. Qualcomm forecast adjusted profit per share of $2.05 to $2.25 versus $2.36 estimates, and said its modem share in the upcoming iPhone would be materially lower than its prior 20% estimate. In plain English, phone-side pressure is already visible while the data-center expansion is still future revenue. That is why the stock can remain range-bound: investors can excuse a temporary margin dip, but they are less likely to do so if the earnings hit keeps deepening.

The pressure is not theoretical either. AI infrastructure demand has tightened semiconductor supply chains, pushing up costs for memory, wafers, packaging and testing. Qualcomm plans to pass some of that through with price hikes, but management said those benefits would emerge gradually over the next couple of quarters. So the market is being asked to look past a short-run squeeze - a fair stance only if follow-through keeps improving.

What would confirm the story, and what would break it

The next few quarters matter more than the narrative. If shipment proof keeps building and phones stabilize, Qualcomm can start being valued as more than a cyclical smartphone chip supplier. If that proof slips, the market will likely return to treating AI as a distant option.

Buy, wait, or pass over

• Buy if you can tolerate a few quarters of weaker phone profit and want early exposure before shipment proof is fully confirmed.
• Wait if you want China inventory cleanup and data-center customer detail to turn into clearer margin recovery.
• Pass if you think the Apple share loss and cost squeeze will last longer than management expects, because that would delay the rerating and compress the reward over the next year.