We recently compiled a list of the 20 Trending AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where QUALCOMM Incorporated (NASDAQ:QCOM) stands against the other AI stocks.
The latest developments in the AI industry from a business perspective highlight a growing momentum, driven by significant investments, innovative product launches, and both regulatory and market challenges. One notable development is the rise of Safe Superintelligence, a company founded by previous OpenAI bigwig Ilya Sutskever, which recently secured $1 billion in funding to advance AI systems with a focus on safety. This significant capital raise from major venture capital firms like Andreessen Horowitz and Sequoia Capital underscores the growing concerns around AI safety, as companies work to ensure that AI technologies are both powerful and aligned with human values. Similarly, the market selloff of Wall Street’s favorite GPU maker following a stellar earnings report, resulting in a market value loss of close to $280 billion, reflects investor anxieties over the sustainability of AI growth, compounded by concerns over regulatory scrutiny.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
Another major business development that investors should keep an eye on is the purchase of AirTrunk by investment firm Blackstone for over $16 billion. AirTrunk, a data center operator, significantly boosts the position of the investment titan in the rapidly expanding AI infrastructure market. Data centers are expected to require up to $2 trillion in investment globally over the next five years to meet the demands of AI technologies, and the AirTrunk acquisition signals strong confidence in this growth by top investment managers. Data center expansions are critical as companies like OpenAI and Anthropic roll out enterprise-grade AI services, which demand immense computing power. For example, Anthropic recently launched Claude Enterprise, a robust AI chatbot, that caters to organizations that need advanced features like larger context windows and GitHub integration, aiming to streamline business operations through AI.
Read more about these developments by accessing 10 Buzzing AI Stocks According to Goldman Sachs and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician testing the latest 5G device, demonstrating the company’s commitment to innovation.
QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 78
QUALCOMM Incorporated (NASDAQ:QCOM) develops and sells foundational technologies for the wireless industry. Stifel analyst Ruben Roy recently chimed in on the rumors about QUALCOMM acquiring chipmaker Intel, noting that such a development appeared unlikely. The analyst said the mega deal appeared similar to other such deals tried in the past that could not clear regulatory hurdles, giving examples of the NVIDIA bid to purchase Arm and the Broadcom proposal to purchase QUALCOMM, both of which collapsed before gaining significant traction. Bank of America analysts also echo these comments. In a recent investor note, they claimed that such an acquisition would allow QUALCOMM to diversify into more semiconductor markets and bring in strategic enterprise clients, but would also create the largest semiconductor company on the planet with Qualcomm’s $33 billion in revenue combined with Intel’s $52 billion.
Led by Vivek Arya, the analysts underlined that both QUALCOMM Incorporated (NASDAQ:QCOM) and Intel were extremely reliant on China sales, and Chinese authorities took years to consider even medium-sized transactions, so the scale/CPU dominance worked against the potential QCOM/INTC combination. China serves as Intel’s largest market, accounting for 26% of its revenue in 2023. Meanwhile, approximately 60% of Qualcomm’s revenue in 2023 came from China and Hong Kong.
Overall QCOM ranks 16th on our list of the trending AI stocks on latest analyst ratings and news. While we acknowledge the potential of QCOM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than QCOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
