Qualcomm Stock Soars on Chip Deal With With Unnamed Hyperscaler
Qualcomm stock skyrocketed after the chipmaker revealed a custom chip deal with an unnamed hyperscaler customer.
The stock was trading 16% higher at $180.97 around 12:15 pm ET on Thursday, jumping as high as 20% in intraday trading. Shares are up less than 6% year-to-date despite the dramatic post-earnings rally.
The company announced its breaking into custom silicon chips with a top hyperscaler customer, though executive were tight lipped about which one.
“We now expect initial shipments for a custom silicon engagement at a leading hyperscaler later this calendar year,” CFO Akash Palkhiwala said on the earnings call.
Despite analysts’ probes in the Q&A portion of the call, Qualcomm did not name the customer beyond saying it’s a “large” and “leading” hyperscaler.
“The only thing I can tell, it is a large hyperscaler, and we are really thinking about a multi-generation engagement. But I think that is what we can say at this point,” Qualcomm CEO Cristiano Amon told one analyst.
The biggest hyperscalers are Amazon’s AWS, Microsoft Azure, and Alphabet’s Google Cloud. Other large players include Alibaba, Oracle, and IBM’s respective cloud businesses.
Qualcomm holds its annual investor day on June 24, where the company could provide further updates.
The chip customer news was enough to help investors look past an otherwise lackluster earnings print, in which guidance fell short of estimates.
Another positive development to come out of the quarterly release was the company reporting that its smartphone chip segment in China is set to hit a bottom in the upcoming quarter and should then return to growth.
The hyperscaler announcement came just days after reports that Qualcomm could be making chips for an OpenAI smartphone which fueled sharp gains on Monday that didn’t hold.
