Photo by Steve Johnson on Unsplash

One of the top gainers on Monday is a familiar name, a pioneer in mobile technology and chip making, Qualcomm (Nasdaq: QCOM). While it’s been around awhile, Qualcomm has been surpassed in the AI era, like just about everyone else, by Nvidia, among others.

But this week, Qualcomm took a big step forward in hopes to gain some market share from Nvidia in the lucrative AI data center space. The firm introduced two new solutions for data centers – its AI200 and AI250 chip-based accelerator cards, and racks. 

These new products are AI inference-optimized solutions for data centers, which means, in layman’s terms, they help train AI models. Specifically, inference optimized solutions are the chips and hardware that help AI process the information it has gathered to provide answers in moments.

Nvidia is the far and away leader in this space with some 80%, or more, market share. These new AI data center solutions are meant to make a dent in Nvidia’s dominance, by providing a more cost-efficient offering that delivers performance and “superior memory capacity” for fast generative AI inference at high performance per dollar per watt – or lower total cost of ownership (TCO).

With Qualcomm AI200 and AI250, we’re redefining what’s possible for rack-scale AI inference. These innovative new AI infrastructure solutions empower customers to deploy generative AI at unprecedented TCO, while maintaining the flexibility and security modern data centers demand,” Durga Malladi, GM, technology planning, edge solutions & data center at Qualcomm Technologies, said.

Deal with Saudi-based AI company

Malladi said the new optimized AI inference solutions are designed to make it easier for developers and enterprises to integrate, manage, and scale AI models that have already been trained.

Both the Qualcomm AI200 and AI250 won’t be commercially available until 2026 and 2027, respectively. But the company already announced a major client for 2026, Humain, which is a new Saudi-based AI company that is backed by the nation’s sovereign wealth fund, the Public Investment Fund (PIF).

Humain is planning to purchase 200 MW of Qualcomm AI200 and AI250 rack solutions for AI inference services in the Kingdom of Saudi Arabia and globally.

By establishing advanced AI data centers powered by Qualcomm’s industry-leading inference solutions, we are helping the Kingdom create a technology ecosystem that will accelerate its AI ambitions of becoming a hub of intelligent computing,” Cristiano Amon, president and CEO at Qualcomm, said.

Investors are bullish

Qualcomm stock jumped some 16% on the day to around $204 per share, at its peak. It settled back down to around $190 per share but was still up 12% on the day.

The stock has paled in comparison to Nvidia and other AI high-flyers, with about a 9% average return over the past 5 years and a 12% average return over the past 10.

But it is also far cheaper than the other AI stocks, trading at just 16 times earnings and 13 times forward earnings.

There weren’t many price targets adjustments after the news, but both Wells Fargo and Bernstein see some positives. Wells Fargo said the Humain deal could generate some $2 billion in revenue, while Bernstein said it could put Qualcomm on the AI map.

Look for more details on this new AI push by Qualcomm when it reports earnings on November 5.

More By This Author:

Trick Or Treat? Mag 7 Earnings and FOMC Highlight Pivotal Week For Stocks
Is Las Vegas Sands Stock A Buy After Massive 13% Spike?
Tesla Posts Record Revenue But Stock Is Falling – Here’s Why