The AI Revolution in the Smartphone and PC Industry Offers Significant Opportunities for Semiconductor Manufacturer Qualcomm, Which Could Experience a Significant Upswing Despite Its Relatively Favorable Valuation in the Sector.

On Thursday, Qualcomm, known for its modem chips used in iPhones and many other wireless devices, recorded nearly a 10% increase in stock prices following the release of quarterly results. These were supported by the sale of AI-enabled Android phones, such as Samsung's latest Galaxy series, which was released in January.

Apple's Introduction of AI-Capable iPhones Could Further Energize the Market for Device-Integrated AI, Which Given Apple's Marketing Clout Is Likely to Significantly Boost Qualcomm, Despite Longstanding Animosity Between the Two Companies. Qualcomm Dominates the Market for Modem Chips that Connect to Cellular Networks, and Its Snapdragon Processor Is the Main Computing Chip for a Variety of Android Phones, Including Samsung's Latest. Additionally, Business is Growing for RF Chips (Radio Frequency) Which Work with Basebands to Filter Interferences and Increase Signal Strength.

Qualcomm particularly benefits from its ability to develop components that work closely together while saving energy – a crucial skill for smartphones that process demanding AI algorithms directly on the device. This integration is especially important as AI applications tend to consume more energy.

Additionally, Qualcomm is focusing on AI-capable PCs, which are expected to enter the market later in the year. Any gain in market share in PCs would mean pure profits for the company, as it currently has little presence there. It is expected that the Microsoft Build conference later this month will unveil many new AI-enabled laptops, including models powered by Qualcomm's Snapdragon processor.

Despite the Mature Markets for Smartphones and PCs Showing Little Growth, On-Device AI Could Provide the Much-Needed Sales Boost. Qualcomm's Shares Closed on Friday with a Price-Earnings Ratio of About 17 – a 39% Discount from the Near-Decade High of the PHLX Semiconductor Index of 28.3, According to FactSet. The Sale of Even Smarter Smartphones Could Give This Sector a Significant Boost.