Adam Hejl
3 min read
What Happened?
Shares of wireless chipmaker Qualcomm (NASDAQ:QCOM) fell 6% in the morning session after the AVGO earnings overhang and the stronger-than-expected jobs report combined to drive one of the broadest global chip selloff of the year.
The damage spread globally: South Korea’s Kospi fell 5.5%, with Samsung down 6.4% and SK Hynix nearly 10%. European names followed: ASML fell 3.8% and Infineon lost more than 6%. Broadcom’s guidance miss reset expectations for the pace of hyperscaler AI chip spending, removing the sector’s most visible growth catalyst. The 172,000-payroll print then eliminated near-term rate cut hopes and introduced rate hike risk by year end per CME FedWatch. Semiconductor valuations, built on aggressive multi-year earnings assumptions, are acutely sensitive to these discount rate movements.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Qualcomm? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Qualcomm’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 7.7% after competitor Nvidia unveiled its new RTX Spark superchip, a powerful processor for Windows PCs that directly challenges Qualcomm’s Snapdragon series. Qualcomm showed up to one of the biggest chip conferences of the year, Taiwan’s Computex, and handed investors a menu with no food.
The company unveiled “Dragonfly,” its new AI data-centre chip brand, but said all the real details would come at an Investor Day on June 24. Meanwhile, Nvidia’s CEO Jensen Huang was next door announcing that its next-generation Vera Rubin AI chips had entered full production and were already shipping to customers including OpenAI, Dell, and Oracle. Nvidia also unveiled its new RTX Spark superchip, a powerful processor for Windows PCs that directly challenges Qualcomm’s Snapdragon series.
The new chip is set to debut in PCs from major manufacturers including Dell, HP, and Lenovo. This development poses a significant threat to Qualcomm, which has invested years in establishing the “Windows on Arm” market. Nvidia enters this space with a major advantage: a software ecosystem already trusted by gamers, creators, and AI developers.
