Qualcomm’s re-entry into the CPU semiconductor market is noteworthy for several reasons, but may not be enough to move the needle.
While it affirms NVIDIA’s decision to open the NVLINK system to other manufacturers with NVLINK Fusion, the CPU market is already dominated by Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD), which are unlikely to sit still. NVIDIA’s role is critical; letting 3rd-party manufacturers embed NVLink hardware into their systems allows AI developers to build semi-custom AI infrastructure faster and more efficiently for data processing than previous systems.
What percent of market share can Qualcomm (NASDAQ:QCOM) gain from the datacenter CPU market? The market is estimated at roughly $14.15 billion in 2025, so moving the needle for its business would take a significant gain.
That is possible due to NVIDIA’s industry-leading position with AI GPUs, but the real opportunity is to establish another revenue stream to help diversify the business. Capturing the robust growth projected for the industry and a position in the replacement/upgrade cycle would be a win for Qualcomm.
Analysts see the global data center industry growing at a moderately high single-digit CAGR through the middle of the next decade for a net gain of over 110%. As it is, Intel commands about 75% of the market and AMD nearly the remainder, so it will be a tough market to crack.
Qualcomm’s NVIDIA-Compatible CPUs a Non-starter for Analysts
Qualcomm’s re-entry into the CPU market with NVIDIA-compatible products was a non-starter for analysts. We tracked no revisions or commentary within the first 24 hours of the announcement, the critical period for market-moving analyst activity. The takeaway for inventors is that Qualcomm is rated as a weak Hold, sentiment is deteriorating with downgrades in 2025, and the price target is trending lower. The consensus rwe eported in mid-May forecasts a 25% upside, but the revision trend forecasts a move into the low-end range near $150.
Analysts’ sentiment is driven by a tepid growth outlook that is unchanged by the news. The analysts forecast about 10% revenue growth in 2025, then a much slower, roughly 2.5% CAGR through the decade’s end. The only truly bullish news is that the capital return and capital return growth outlook remain intact, including the dividend and share repurchases. The dividend annualizes to more than 2.25% with shares trading at the low end of the analysts’ range, and buybacks are substantial. Repurchases in FQ2/CQ1 2025 reduced the count by 1.3% year-over-year and by about 1% on a year-to-date basis.
Qualcomm’s balance sheet and value gains are another bonus for investors and long-term holders. The company’s balance sheet is a fortress capable of sustaining the capital return for the foreseeable future. The details at the end of FQ2 included flat assets and debt, reduced total liability, and increased equity. Equity was up nearly 6% with long-term debt less than 0.5x and a solid cash balance, about 0.5x the debt. The company is on track for inclusion in the Dividend Aristocrats Index in 2030, but the CAGR is slowing. The last increases were mid-single-digit amounts, but investors should expect them to slow into the low-single-digit range.
The Technical Outlook: Range-Bound QCOM at Inflection Point
The price action in QCOM stock moved higher in the first half of May and may continue to advance in Q2. However, the market is range-bound and at a critical inflection point within the range that may cap the move. That is a cluster of moving averages that coincide with a previous support level.
If the market can not move higher from this level, it will likely fall back to the range’s low end soon after. Even so, a move higher has limits and may not advance above recent highs near $175.
