Qualcomm Rises on Multi-Year SpaceX Deal and Data Center Expansion Plans

Qualcomm shares gained 1.6% in morning trading to reach $179.30, bucking broader market declines that saw the Nasdaq slide 0.6% and the S&P 500 fall 0.3%. The advance followed the announcement of a multi-year deal with SpaceX to support Starlink Mobile's planned 5G service, which will operate from space and the ground. Qualcomm called the agreement its largest 5G contract to date. Under the terms, it will supply radio gear, baseband units and software for tens of thousands of cell sites starting in 2027.

Beyond cellular networks, Qualcomm is actively pursuing data center business to capture AI inference workloads as an energy-efficient alternative to Nvidia. Chief Executive Officer Cristiano Amon stated at Yahoo Finance Invest that the tech sector's recent drop does not reflect an AI correction for Qualcomm, given that the business is just entering data centers. The firm is aiming for more than $15 billion in data center sales by fiscal 2029. Additionally, Qualcomm noted in early September that Amazon could buy up to $60 billion of its AI data center processors and connected items under an ongoing partnership.

The push to diversify beyond handsets comes after softer quarterly figures. On Nov. 4, Qualcomm reported fiscal fourth-quarter earnings of $2.17 per share on $10.44 billion in revenue, marginally above consensus estimates of $2.16 per share and $10.12 billion. However, revenue fell 8.4% year over year, marking three back-to-back quarters of contraction. Management also offered a softer outlook than anticipated, as OEM inventory drawdowns in China and memory constraints continue to challenge mobile revenue.

Wall Street opinions on the stock remain divided. MarketBeat tracked a consensus Hold rating and an average price target of $197.13. Analysts at Robert W. Baird have set a $320.00 price target, while Rosenblatt Securities recently lowered its objective from $235.00 to $205.00 with a Buy rating. Conversely, Susquehanna trimmed its target from $185.00 to $165.00 with a Neutral stance, and Barclays analyst Tom O'Malley kept a Sell rating with a $150 price target.

Institutional activity has been varied. During the third quarter, Jefferies Financial Group increased its stake by 1,650.5% to $58.86 million, while King Luther Capital Management pared its holdings by 1.3%. Qualcomm also declared a quarterly dividend of $0.92 per share, yielding about 2.1%, payable on Dec. 17 to stockholders of record as of Dec. 3.