With its astonishing 1,321% five-year growth and a market cap that surpasses most tech giants, Nvidia (NASDAQ: NVDA) has long been the favorite in the artificial intelligence (AI) race.
But like on any track, not everyone is betting solely on the frontrunner, and many investors are scouting the scene for a rival that could come close to matching Nvidia’s performance.
One name on the list of potential candidates could soon climb up closer to the top: Qualcomm (NASDAQ: QCOM). Here’s why.
Breaking through in the rising semiconductor market
Despite a -13.04% dip in year-to-date (YTD) performance and recent investor concerns regarding new advanced AI models from China, Nvidia continues to dominate in the AI and semiconductor sectors while enjoying significant gains from data centers and enterprise software solutions.
Meanwhile, Qualcomm, a company mostly associated with telecommunications technology, has been quietly reinventing itself by focusing on the so-called Edge AI and bringing artificial intelligence closer to the user — to smartphones, PCs, and electric vehicles (EV).
If generative AI shifts to more hands-on systems, i.e., closer to where the data is located rather than the cloud, Qualcomm’s expertise in low-power, high-efficiency chips could position it as a leader in a promising, nascent sector.
Accordingly, some predictions suggest Qualcomm stock could see a max +48.70% increase in the next 12-month period, with a projected +13.23% average.
Two signs point to this: the recent breakthrough by DeepSeek, which reportedly developed its AI models with more affordable computing requirements, and the projected growth of the EV market.
Qualcomm stock predictions
DeepSeek came to the fore seemingly out of nowhere, offering an alternative to OpenAI’s GPT and generating a lot of controversy regarding AI affordability and broader adoption.
The idea of employing more affordable chips down the line plays directly into Qualcomm’s strengths, given its focus on Edge AI semiconductors, which resulted in a 17% YoY revenue growth and 21% earnings per share (EPS) bump in Q2 FY2025.
On the other hand, the EV industry is expected to reach a steady annual growth rate of 6.01% by 2029, ultimately leading to a projected market volume of US$990.4 billion.
While high-end chips may be ideal for innovative flagship models, widespread adoption will certainly depend on affordability.
Accordingly, lower-cost AI solutions could become the go-to choice for automakers trying to scale smart car features.
As Qualcomm has already worked together with major automakers in the past, including BMW (FWB: BMW) and Mercedes-Benz (XETR: MBG), other high-profile future partnerships are more than possible.
All in al, with a strong foothold in the automotive sector and a track record of delivering cost-effective chip solutions such as those brought into the spotlight by DeepSeek, the Californian company may end up riding the next wave of AI adoption, just as Nvidia did.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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