Qualcomm shares rebounded sharply after hours on Wednesday following CEO Cristiano Amon’s announcement that the company will begin shipping data center chips to a “large hyperscaler” later this year. Initially, the stock dipped as much as 7% after reporting second-quarter earnings that exceeded Wall Street estimates but fell short on forward guidance. Despite not naming the customer, Amon hinted at more information to come during Qualcomm’s investor day in June.

This development is significant for Qualcomm as it seeks to regain traction in the competitive chip market, particularly in the AI sector where it has lagged behind leaders like Nvidia. The company reported adjusted earnings per share of $2.65, beating estimates, but forecasted third-quarter revenue between $9.2 billion and $10 billion, missing analyst expectations. The ongoing memory price surge and declining smartphone shipments, particularly in China, pose challenges, but Qualcomm’s automotive segment showed strong growth.

A key takeaway for market professionals is the potential impact of Qualcomm’s partnership with OpenAI, which could position it favorably in the emerging AI chip market, particularly as demand for AI-driven devices grows.

Source: cnbc.com