The AI ​​Stock Nobody’s Talking About That Could Be This Year’s Biggest Winner

Smartphone chip specialist Qualcomm (QCOM +15.19%) has underperformed the broader semiconductor sector over the previous three years, gaining 58% throughout this era, in contrast with the 258% positive aspects clocked by the PHLX Semiconductor Sector index.

Qualcomm’s underperformance is not shocking. While a number of semiconductor shares have benefited considerably from the booming demand for synthetic intelligence (AI) chips, Qualcomm’s reliance on the smartphone market for almost all of its income has been a headwind for the inventory.

However, Qualcomm inventory popped impressively last week following the discharge of the corporate’s newest quarterly outcomes on April 29. Let’s see why that was the case and verify why this semiconductor stock is an underrated gem that may very well be among the best methods to capitalize on the AI ​​sector’s development in 2026.

Qualcomm may very well be on the verge of a breakthrough in AI chips

Qualcomm’s outcomes for its fiscal 2026’s second quarter (ended March 29) weren’t nice. Its income and adjusted earnings declined yr over yr. The firm noticed a big 13% year-over-year decline in its smartphone income to $6 billion, which is not shocking given the prevailing softness on this market.

However, Qualcomm administration’s feedback a couple of potential breakthrough within the AI ​​information middle chip market have boosted buyers’ confidence about its prospects. Responding to a query on the newest earnings callQualcomm CEO Cristiano Amon famous that there’s sturdy curiosity within the firm’s customized application-specific built-in circuits (ASICs).

Qualcomm is partaking with a number of corporations for its customized AI processors. Importantly, a big hyperscaler is reportedly in talks with Qualcomm to develop a number of generations of customized AI processors. It’s value noting that Qualcomm has been pushing the envelope within the AI ​​chip marketplace for a while now, and it announced a breakthrough in this space last year.

It now seems that the rising tilt towards AI inference functions, which do not require as a lot computing horsepower because the mannequin coaching section, is a tailwind for Qualcomm. The firm has already been pushing the envelope in local AI processing in edge devicesand the potential positive aspects in customized AI processors and inference-focused accelerators may unlock an entire new development alternative for Qualcomm.

Management indicated that it has lined up just a few buyer wins for its information middle chips and AI inference accelerators and can share the small print at its Investor Day subsequent month. So there is a good likelihood that Qualcomm’s newfound momentum is right here to remain.

Today’s Change

(15.19%)$29.26

Current Price

$221.83

Key Data Points

Market Cap

$203B

Day’s Range

$187.64 – $222.41

52wk Range

$121.99 – $222.41

Volume

21M

Avg Vol

14M

Gross Margin

54.80%

Dividend Yield

1.85%

The valuation means that the inventory is poised for an enormous rally

Qualcomm shares are buying and selling at simply 19 occasions earnings proper now. Of course, there is a cause it is low cost. Weakness within the smartphone market has been hurting its backside line. However, now we have already seen in Intel‘s case that the market doesn’t take long to reward a semiconductor firm that begins to chop its enamel within the AI ​​chip market.

In addition, Qualcomm is poised to learn from AI adoption past information facilities. Its automotive enterprise grew by 38% year-over-year within the earlier quarter to $1.33 billion, whereas extra corporations have been flocking to its edge AI computing platform for creating bodily AI functions.

All this implies that Qualcomm may go on a terrific bull run, and it could even turn into one of many largest winners of the AI ​​revolution in 2026.