Nvidia chief executive Jensen Huang brought Qualcomm (QCOM) in focus late Monday, issuing an explicit public endorsement of the rival chipmaker.
Speaking to tech executives and reporters during his highly anticipated press tour in Seoul, Huang praised QCOM’s dominance in mobile hardware before playfully instructing the audience to “buy their stock”
The unscripted remarks caught Wall Street completely off guard, immediately triggering a wave of after-hours buying.
Though the stock saw heavy selling on Tuesday, versus its year-to-date low, Qualcomm stock is up more than 60% at writing.
Why Huang endorsed the stock
Addressing attendees regarding Nvidia’s strategic positioning, Jensen Huang freely acknowledged that his company lacked a competitive edge in smartphones.
However, he quickly reframed this limitation as a mutual victory for the broader tech ecosystem.
“I don’t think we are incredibly good at mobile devices – and I don’t think it’s necessary,” Huang noted, setting up the ultimate punchline; “They’re doing such a good job. Buy their stock.”
This off-the-cuff validation from the undisputed poster child of the generative artificial intelligence boom instantly injected fresh speculative enthusiasm into QCOM shares.
Note that the semiconductor firm currently pays a healthy dividend yield of 1.82% – which makes it even more attractive as a long-term holding.
Huang’s endorsement fails to prevent Tuesday’s pullback
The sudden alliance brought temporary relief to Qualcomm shares following a brutal week of market volatility.
Tensions peaked just days ago at Computex – where Nvidia unveiled its powerful new RTX Spark superchip for Windows PCs, standardizing an aggressive push directly into Qualcomm’s flagship “Windows on Arm” computing narrative.
Simultaneously, a conservative AI revenue forecast from Broadcom had dragged down the entire semiconductor index in a sweeping sector-wide sell-off.
By publicly advocating for his competitor, Jensen Huang basically signaled to nervous institutional investors that Nvidia has no immediate intention of challenging QCOM’s premium mobile moat – providing crucial psychological support to a jittery market.
How Wall Street recommends playing Qualcomm Inc
While retail investors celebrated the immediate price spike, seasoned market analysts are voicing growing anxiety over the sheer influence of the “Jensen Bump.”
Industry skeptics suggest that a single executive’s casual commentary wielding this much market-moving power hints at dangerous, bubble-like exuberance.
For now, the macroeconomic landscape remains entirely captive to Huang’s words – proving once again that in the current tech environment, an Nvidia recommendation outweighs the conventional financial metrics.
Investors should also note that Wall Street analysts do not particularly agree with Huang on QCOM stock.
According to Barchart,the consensus rating on Qualcomm Inc sits at “hold” only, with the mean price target of nearly $185 indicating potential downside of some 13% from current levels.
Analysts’ cautious stance partly reflects valuation concerns, with the company currently going for a rather stretched 27x forward earnings.
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