Bank of America says Qualcomm’s (QCOM) latest rally may not be sustainable, believing that investors may be overestimating the near-term payoff from the company’s new AI chips.
In a new press release, the Nvidia (NVDA) rival unveiled its next-generation AI200 and AI250 inference chips for data centers designed for power efficiency and memory performance for generative AI workloads.
“Building off the Company’s NPU technology leadership, these solutions offer rack-scale performance and superior memory capacity for fast generative AI inference at high performance per dollar per watt—marking a major leap forward in enabling scalable, efficient, and flexible generative AI across industries.”
Qualcomm says the AI200, which will be available next year, comes with 768 GB of LPDDR (low power double data rate) per card for higher memory capacity and lower cost. Meanwhile, the AI250 model slated for release in 2027 aims to deliver greater than 10x higher effective memory bandwidth and much lower power consumption.
News of the new AI chips sent QCOM soaring on Monday, from $168.95 to as high as $205.95 before closing the day at $187.68 – an 11% surge.
But Bank of America sees the rally as a potential sell-on-news event. In a new post on X, CNBC Nasdaq correspondent Kristina Partsinevelos says the bank flags the move as a potential “fade,” noting that the AI200 and AI250 are lower-end chips without high bandwidth memory (HBM).
The banking behemoth also says Qualcomm has disclosed only one Middle East customer so far with an estimated potential of $1 billion to $2 billion in revenue potential. But the firm’s market cap rose by about $20 billion in just one day.
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