Qualcomm Surges 2.8% on AI and Automotive Hype: What's Fueling the Rally?

Summary
• Qualcomm (QCOM) trades at $159.17, up 2.82% intraday
• UBS raises price target to $165, signaling 3.76% upside
• Q2 revenue hits $10.8B, exceeding guidance by $300M
Qualcomm’s stock is surging on July 21, driven by a bullish UBS upgrade and robust Q2 earnings. The $159.17 level reflects a 2.82% intraday gain, with the 52-week high of $182.64 still out of reach. Key catalysts include a 17% YoY revenue increase, 59% automotive growth, and expanding AI partnerships. Traders are now scrutinizing technical levels and options volatility as the stock tests critical resistance.

UBS Upgrade and Q2 Earnings Outperformance Drive QCOM Rally
Qualcomm’s sharp intraday rise stems from UBS’s upgraded price target to $165 and a robust Q2 earnings report. The firm reported $10.8B revenue, exceeding guidance, with automotive revenue growing 59% YoY and IoT up 27%. Non-GAAP EPS of $2.85 beat estimates, while QCT handset revenue rose 12%. UBS’s ‘neutral’ rating implies a 3.76% upside from the previous close, reflecting confidence in Qualcomm’s AI-driven innovations and expanding automotive partnerships. Institutional investors, including Brighton Jones and Proficio Capital, increased holdings in Q4, signaling structural support.

Semiconductors Sector Mixed as Intel Trails QCOM’s Momentum
While Qualcomm outperforms, the broader semiconductor sector remains fragmented. Intel (INTC), the sector’s leader, rose 0.65% on July 21 but trails QCOM’s 2.82% gain. TSMC and AMD also face mixed momentum, with TSMC’s 2-nm transistor prototyping and AMD’s MI308 China resumption creating sector divergence. Qualcomm’s focus on AI, automotive, and IoT contrasts with Intel’s struggles in the AI GPU race and recent layoffs. This divergence highlights Qualcomm’s unique positioning in high-growth adjacent markets.

Options and ETF Plays: QCMU and QCOM20250725C160 Lead the Charge
• 200-day MA: 158.02 (near) • RSI: 39.85 (oversold) • MACD: 0.3155 (bullish) • Bollinger Bands: 150.74–163.21 (within upper band)
• Direxion Daily QCOM Bull 2X ETF (QCMU) surges 5.49% on leveraged exposure
Technical indicators suggest a short-term bullish setup. The 30-day moving average at 156.29 and 200-day at 158.02 indicate the stock is consolidating near key support. QCMU’s 5.49% gain underscores leveraged ETF participation. For options, QCOM20250725C160 and QCOM20250725C162.5 stand out:
• QCOM20250725C160 (Call, $160 strike, July 25 expiry):
- IV: 29.01% (moderate)
- LVR: 107.76% (high leverage)
- Delta: 0.3938 (moderate sensitivity)
- Theta: -0.4713 (high time decay)
- Gamma: 0.0715 (high sensitivity to price changes)
- Turnover: 247,424 (liquid)
- Payoff at 5% upside ($167.13): $7.13 per contract
This option balances leverage and liquidity, ideal for a moderate bullish view.
• QCOM20250725C162.5 (Call, $162.5 strike, July 25 expiry):
- IV: 28.60% (moderate)
- LVR: 226.29% (very high leverage)
- Delta: 0.2306 (low sensitivity)
- Theta: -0.3175 (high time decay)
- Gamma: 0.0573 (moderate sensitivity)
- Turnover: 60,525 (liquid)
- Payoff at 5% upside ($167.13): $4.63 per contract
High leverage suits aggressive bulls expecting a breakout above $162.50.
If $158.82 resistance breaks, QCOM20250725C160 offers a balanced play. Aggressive buyers may consider QCOM20250725C162.5 into a test of the 163.21 upper Bollinger Band.

Backtest Qualcomm Stock Performance
The 3% intraday surge in QCOM's stock price has historically led to positive short-to-medium-term gains. The backtest data shows that:1. Immediate Gains: Following the 3% surge, QCOM has a 54% chance of a positive return within three days, with an average return of 0.03%.2. Short-Term Performance: Over a ten-day period, the win rate remains high at 49.71%, with an average return of 0.37%.3. Medium-Term Performance: After thirty days, the win rate is 52%, with an average return of 1.11%. The maximum return observed was 2.68% on day 57, indicating that QCOM can continue to perform well in the days following the initial surge.In conclusion, a 3% intraday surge in QCOM's stock price is a positive signal, with a high likelihood of continued upward movement in the short to medium term. Investors may consider these findings when assessing the potential for QCOM in their portfolios.

Bullish Momentum Intact—Watch 158.82 and 157.76 Key Levels
Qualcomm’s 2.82% rally reflects strong fundamentals and strategic positioning in AI and automotive. The 158.82 resistance and 157.76 support levels are critical for near-term direction. With UBS upgrading its target and institutional buying evident, the stock’s momentum is likely to persist if it clears $159.25. Investors should also monitor Intel (INTC), the sector leader, which rose 0.65% today, as a barometer for broader semiconductor sentiment. For a bullish stance, consider QCMU for leveraged exposure or QCOM20250725C160 for a balanced options play. If $158.82 breaks, the 163.21 upper Bollinger Band becomes the next target.