Qualcomm (QCOM) Stock Hits All-Time High After ByteDance AI Chip Deal

TLDR

• Qualcomm stock hit an all-time high of $247.91, up 6.66% on the day.
• The stock has delivered a 68% total return over the past year.
• ByteDance is set to buy millions of Qualcomm ASICs to power its AI agent software.
• The deal marks one of Qualcomm’s first major wins for its new AI-focused chip business.
• Qualcomm trades at a P/E of 26.85 with a market cap of $258 billion; InvestingPro flags it as potentially overvalued.

Qualcomm had a big day on Tuesday. The chipmaker’s stock touched $247.91, marking an all-time high, and closed up around 6.66% to 6.80% depending on the session. The move was fueled by a Bloomberg report that ByteDance, the parent company of TikTok, had agreed to buy millions of Qualcomm chips.

The chips in question are application-specific integrated circuits, known as ASICs. ByteDance plans to use them to run its AI agent software. According to Bloomberg sources, the Chinese tech giant is set to become one of Qualcomm’s first major customers for this type of AI-focused chip.

The deal is a notable win for CEO Cristiano Amon and his team. During a post-earnings call last month, Amon said the company was in “engagement” with several potential customers for its ASIC products, though he didn’t name them. The ByteDance news put a face to that pipeline.

QUALCOMM Incorporated, QCOM

Qualcomm’s stock has been on a strong run lately. Over the past year, it has delivered a 68% total return. The company now carries a market capitalization of $258 billion and trades at a price-to-earnings ratio of 26.85. InvestingPro analysis does flag the stock as potentially overvalued relative to its Fair Value estimate.

Analyst Upgrades Add Fuel

The ByteDance headline isn’t the only reason Wall Street has been warming to Qualcomm. Bernstein recently upgraded the stock to Outperform from Market Perform, raising its price target to $210 from $180. The firm pointed to Qualcomm’s leadership in AI-enabled smartphone processors as the key reason for the upgrade.

Tigress Financial Partners also raised its price target on QCOM, moving it to $280 while maintaining a Buy rating. Tigress cited growth opportunities in AI agent devices, the automotive sector, and IoT hardware. The firm also flagged Qualcomm’s new $20 billion share buyback program as a positive signal for investors.

Those bullish calls come despite a rough patch the sector hit not long ago. Qualcomm dropped 13% during a difficult trading session tied to inflation data, a reminder that chipmaker stocks can swing hard in both directions.

Expanding Beyond Smartphones

Qualcomm has long been associated with smartphone processors, but the company has been pushing hard to grow in new markets. The ByteDance deal is part of that broader strategy.

Amon has been building out the company’s ASIC business to target AI infrastructure customers. Landing ByteDance, a company that runs one of the most downloaded apps in the world, gives that push real credibility. The AI agent software ByteDance is developing requires serious compute power, and Qualcomm is positioning itself to provide it.

Elsewhere in the chip sector, AMD reported strong earnings with revenue of $10.25 billion and EPS of $1.37, both beating analyst expectations. That result helped lift chipmaker stocks broadly in recent premarket sessions, adding a rising-tide tailwind to Qualcomm’s individual story.

As of Tuesday’s session, QCOM was trading near its all-time high of $247.91, with investors watching closely to see whether the ByteDance deal marks the start of a larger shift in Qualcomm’s customer base.

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