TradingKey - Qualcomm closed September 10 at $176.88, up 0.27% and as expected near the supplied stub of $176.83, indicating a strong September 11 open. Strong recovery from the late July low of $142.29 continued with even higher lows and an uptrend. The recent new milestone and catalyst for Qualcomm was the multi-generational Amazon AI data-center silicon and optical-connectivity agreement, including links up to 1.6T. This is important, as Qualcomm is attempting to offset the decline of Apple modem revenue with gains in the data centers, automotive, and IoT markets.

Amazon Deal Gives Qualcomm Hyperscaler Validation

The September 8 Amazon deal is Qualcomm’s first big deal validating their AI-data-center push beyond slide deck presentations. The warrant can vest against commercial arrangements, binding purchase orders and actual Amazon purchases of Qualcomm server-chip products, technology, systems and manufacturing services, up to $60 billion in payments. The warrant structure is connected to real dollars spent and purchased.

Qualcomm is targeting $5 billion in data-center revenue in fiscal 2027 and more than $15 billion by fiscal 2029. Investors now have a real hyperscaler client to reference, as the Amazon deal supersedes management’s projections.

The fundamental focus is on AI inference, where Qualcomm believes long optimizations of performance per watt will be important for large deployments. The companies will also work on future generations of optical connectivity at 1.6 Tbps and beyond.

Automotive Growth Is Already Real

Qualcomm's automotive and IoT revenues are already growing significantly. Qualcomm reported double-digit growth in its automotive revenue for the 23rd quarter in a row. In the third fiscal quarter of 2026, the company reported a 61% year-over-year growth in its automotive revenue and an 9% year-over-year growth in its IoT revenue to $1.588 billion and $1.83 billion, respectively. Qualcomm also has an agreement with BMW to use Snapdragon Cockpit and Snapdragon Ride over the next decade to support digital cockpits and advanced driver assistance systems.

At its Investor Day in June, Qualcomm set a target of generating approximately $10 billion in automotive revenue by fiscal 2029. If Qualcomm hits this target or comes close to it while also growing its data-center revenue, its earnings mix would be substantially different from its current dominant smartphone revenue stream.

Apple Modem Loss Is the Main Near-Term Headwind

The not so good news is, it’s still Apple. Some months ago, management thought Qualcomm would have roughly 20% modem share in the next iPhone generation; management later said the actual share would be well below 20% because the transition was moving faster than expected.

During the week that just passed, Apple’s new iPhone Duo uses Apple’s in-house C2 modem. Qualcomm knew this shift was coming, but the timing matters. The company now needs to quickly expand its relationship with Amazon, Meta, automotive and other non-handset businesses to make up for the lost revenue.

Fiscal Q3 Handsets Fell 20%

This is why the shift to the business segments away from handsets is urgent. In fiscal Q3, revenue fell 4% to $9.947 billion with handset revenue dropping 20% year over year to $5.086 billion. Adjusted EPS declined to $2.21.

During this period, the business segments of automotive and IoT grew 28%, making the business much more interesting than the overall decline reported. For fiscal Q4, Qualcomm still expects revenue in the range of $9.7-$10.5 billion and adjusted EPS in the range of $2.05-$2.25.

The company is also facing higher wafer and packaging costs as well as rising costs of memory and materials. Price increases to address these higher costs started to go into effect on September 1, 2026. This creates concern for both margins eroding and demand for products in the handset segment suffering.

Dragonfly Expands the AI Infrastructure Story

Dragonfly is part of Qualcomm's data center offerings aiming at the agentic-AI era with its custom silicon, AI accelerators, networking, and CPUs. Qualcomm does not aim to replace Nvidia for all workloads. Rather, they want to gain ground in inference, where efficiency and total cost of ownership are as important as training performance.

The Modular acquisition is also important as hardware is not the only component. Qualcomm lacks Nvidia's major competitor advantage of the CUDA ecosystem. Qualcomm needs to develop better tools for developers and adopt a more flexible software layer in order for Dragonfly to gain market share.

Valuation Leaves More Room Than Many AI Peers

Current peer group valuations put Qualcomm at 19x forward earnings, while many high-growth AI stocks are valued much higher. This matters, because the market still prices Qualcomm as a handset legacy business entangled in Apple and earnings risks.

Strong data center, automotive and IoT growth would lead management's targets and catalyze valuation expansion as a secondary catalyst. The author expects Amazon's warrant package to create dilution. However, if Amazon's purchases reach the commercial milestones that vest more of the 25 million-share warrant, investors may view that dilution as acceptable given the associated revenue.

Qualcomm Technical Analysis: $182.70 Is the Breakout Trigger

At the September 10 close, Qualcomm traded at $176.88, slightly above the supplied $176.83 chart reference and below immediate resistance at $177.36. In the 2 hour chart, buyers are constructive with a trend of higher lows starting with the recovery from $142.29.

Qualcomm Stock Price Chart - Source: Tradingview

The first resistance level is $177.36 and the larger level is $182.70 to $185.00. A break above $182.70 would confirm the reversal. The bulls would then focus on breaking $192.77, and if that is cleared, the focus would shift to $200.19.

The RSI is at 62 and is still constructive, but is rolling over below 65, and is therefore constructive, but now losing bullish momentum. The next support level would be $171.46, which is a combination of the trend line and previous resistance level. Below that is $167.54 and $164.94.

Key Levels

·       Last close: $176.88

·       Immediate resistance: $177.36

·       Main breakout zone: $182.70-$185

·       First target: $192.77

·       Higher score target: $200.19

·       Key levels of support: $171.46

·       Primary support formed by the moving average: $167.54

·       Even lowersupport: $164.94

·       RSI: 62 looking constructive, but cooling

Why is Qualcomm stock in focus now?

The agreement with Amazon’s AI infrastructure is considerably better and comes at a better time for Qualcomm as Apple’s modem revenue is dropping and the agreement provides a much needed diversification. This can be in addition to the 61% growth of automotive and a broader Dragonfly push.

What level confirms further QCOM upside?

If we break above the $182.70 and form a sustained 2 hour close, there is a strong chance that we continue upward to the new targets of $192.77 and $200.19.

Bottom Line

Qualcomm’s September 11th setup is more than just a recovery trade on smartphones. The agreement with Amazon provides real customer validation to Qualcomm’s data center strategies, on top of the growth of automotive and reasonable valuations relative to competitors. The biggest risks towards Qualcomm are Apple’s modem decline, smartphone decline, rising component costs and the hard launch of the Dragonfly. Otherwise I am looking long as long as we hold above $171.46. $182.70 remains the breakout level that needs to be cleared before the next move toward $192.77-$200.19 is confirmed.

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