Qualcomm announced Samsung expansion and new AI deals that could reshape its growth trajectory amid competition from Intel, Marvell, and Astera Labs.

Qualcomm Incorporated (NASDAQ:QCOM) is entering a new phase of growth as two major catalysts—the expansion of its Samsung partnership and its push into AI infrastructure—reshape the company's long-term outlook.

The expanded collaboration with Samsung paves the way for Snapdragon platforms to power Samsung's latest Galaxy smartphones, smartwatches, and future AI-powered smart glasses. This partnership reinforces Qualcomm's dominance in premium Android smartphones, validates its leadership in on-device AI, and creates opportunities to expand Snapdragon into new categories such as AI PCs, XR devices, and connected technologies. Securing Snapdragon chips for more Galaxy flagship models will provide Qualcomm with higher premium chipset shipments, stronger QCT segment revenue, and greater visibility into future earnings.

While smartphones remain Qualcomm's largest business, management is increasingly focused on reducing its dependence on the cyclical handset market by expanding into AI infrastructure. The company has been building relationships with hyperscale cloud providers as it develops custom AI ASICs, server CPUs, and AI inference accelerators.

For years, NVIDIA, Intel, and Advanced Micro Devices have dominated data-center computing, while Broadcom has become a leading supplier of custom AI chips for hyperscalers. Qualcomm is attempting to establish itself as another major supplier, having announced AI infrastructure collaborations with Microsoft and Meta Platforms. Management expects these initiatives to become a meaningful contributor to long-term growth, targeting at least $5 billion in annual AI data-center revenue by fiscal 2027 and $15 billion annually by fiscal 2029. Achieving those goals would represent one of the most significant strategic transformations in Qualcomm's history.

Qualcomm's investment thesis is evolving from being primarily a smartphone chip company into a diversified AI computing platform. It continues to dominate premium Android smartphones through Snapdragon processors and industry-leading 5G modems. Similarly, generative AI is becoming the next major differentiator in smartphones, and if such capabilities become the standard over the next several years, Qualcomm could enjoy stronger average selling prices and higher chip content. The larger opportunity, however, lies in AI infrastructure.

Qualcomm trades at a substantial valuation discount to Broadcom despite pursuing many of the same AI infrastructure opportunities. It trades at a price-to-earnings multiple of nearly 18x, a price-to-sales multiple of 4.73x, and EV/EBITDA of 14.66x. In contrast, Broadcom Inc. (NASDAQ:AVGO) trades at a price-to-earnings multiple of nearly 63x, a price-to-sales multiple of 24.89x, and EV/EBITDA of 45.94x.

There are significant risks to consider. The smartphone market remains Qualcomm's largest source of revenue, but global handset shipments have matured as replacement cycles lengthen and premium market growth slows. Another long-term risk is Apple's continued development of its own modem technology, which could gradually reduce Qualcomm's modem revenue as Apple transitions away from third-party suppliers. Execution risk also remains significant in AI infrastructure. Qualcomm previously attempted to enter the server market without establishing a lasting presence, and today's competitive landscape is arguably even more challenging, with NVIDIA dominating AI accelerators, Broadcom maintaining strong relationships supplying custom AI silicon to hyperscalers, and AMD and Intel continuing to invest aggressively in AI computing platforms.

Qualcomm now offers a combination of a mature, cash-generating smartphone franchise and a high-growth AI infrastructure opportunity. The smartphone business provides stable earnings and licensing cash flow, while the AI data center initiative gives investors exposure to one of the fastest-growing segments of the semiconductor industry.

Institutional holding remains relatively constructive of the QUALCOMM investment thesis amid the diversification push. According to the Insider Monkey database, 71 hedge funds held shares in the company as of the first quarter, moderately down from 78 in the previous quarter. Notably, AQR Capital Management increased its position by 60% to approximately $279.7 million, while Squarepoint Ops LLC expanded its stake by 248% to roughly $276.7 million, highlighting continued institutional confidence in Qualcomm's long-term diversification strategy. Meanwhile, Qualcomm's short interest stands at 3.43%, representing approximately 36.2 million shares sold short, suggesting relatively modest bearish sentiment. This remains higher than Broadcom's short interest of 1.47%.

Overall, investors appear interested in QCOM's AI and diversification potential, but are still waiting for stronger evidence that its data center strategy can deliver meaningful revenue.