Semiconductor stocks have been on a wild ride in 2026. As a group, chipmakers saw their prices soar in the second quarter, as a rush to buy more memory chips and artificial intelligence (AI) accelerators pushed the stocks of practically every company in the sector higher. But July brought a severe downturn throughout the industry, as investors rotated to other companies.
That’s created second-chance opportunities for investors who missed out on the incredible runs of some semiconductor stocks at the start of the year. One overlooked opportunity in particular looks like a great buy, given the future of AI compute.
Here’s why investors should take a closer look at Qualcomm (QCOM +0.65%).
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The future of artificial intelligence chips
Qualcomm stands to benefit from demand for AI in two ways.
First, it creates high-end mobile chipsets for smartphones. As more AI capabilities move onto devices, Qualcomm could see demand for its Snapdragon line of chips increase. The revamped Siri and other AI capabilities from Apple coming to iPhones this fall could spur demand for Android phones with similar AI features and increased demand for high-end Snapdragon chips.
Qualcomm has already used its position to raise prices rather than absorb higher costs in today’s market. Its flagship Snapdragon 8 came with a hefty price hike over the previous generation, and it said it’ll raise prices starting in September due to higher supply costs. A sign of a strong moat is that it can mitigate margin pressure with higher prices.
The second area where Qualcomm could generate significant revenue growth from AI over the coming years is in data centers. Qualcomm currently has a limited presence in data centers, but it recently started developing AI chips and systems. Management guided for at least $15 billion in data center-related revenue by 2029 at its investor day in June.
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It’s already shipping connectivity chips for data centers, and management said it has two hyperscaler customers for its custom silicon solutions, with shipments expected in 2027. It also has a deal with Meta Platforms to use its CPUs for AI agents starting in the second half of 2028. That should produce a rapid revenue ramp-up, pushing it toward its 2029 target.
There are some near-term headwinds that have warranted a bit of a sell-off. Rising memory prices are holding back the smartphone market. Additionally, Apple is dropping Qualcomm’s baseband chips from its iPhones. However, Qualcomm is doing a good job shifting away from its reliance on mobile chip sales and licensing.
The stock currently trades for just 15.3 times forward earnings expectations. While revenue growth may be slow this year and next as it works through the headwinds, it should reaccelerate in the last few years of the decade as data center sales pick up. At the current price, investors are getting a great opportunity to buy an excellent chipmaker.
Adam Levy has positions in Apple, Meta Platforms, and Qualcomm. The Motley Fool has positions in and recommends Apple, Meta Platforms, and Qualcomm. The Motley Fool has a disclosure policy.
