Morgan Stanley's Pivot: Qualcomm Price Target Jumps to $231 on AI Momentum

In a significant shift in outlook, Morgan Stanley has issued a research report substantially raising its assessment of Qualcomm. The investment bank boosted Qualcomm's price target to $231 from $146 and upgraded its rating from Underweight to Equal-weight. This reassessment is rooted in what analysts see as a rapidly evolving strategic position for the company.

AI and Data Center: An Accelerating Growth Engine

The report centers on the accelerating pace of Qualcomm's business diversification, particularly into artificial intelligence and data center markets. During a recent investor day, company management presented an optimistic outlook that exceeded market expectations.

A key highlight was the firm's explicit guidance of $5 billion in AI-related revenue by fiscal year 2027. This target is at least double prior market expectations and signals Qualcomm's assertive push to position itself as a central player in the AI ecosystem.

Ambition in a Trillion-Dollar Market: From Chips to Infrastructure

Morgan Stanley's analysis notes a broader ambition from Qualcomm's leadership. The company aims to capture over 5% of the total addressable data center market—a market estimated in the trillions of dollars—within the next five to seven years.

Achieving this goal would mark a fundamental evolution, transforming Qualcomm from primarily a mobile communications chip supplier into a diversified AI infrastructure company.

Revised Financial Forecasts

Reflecting the increased confidence in AI and data center growth, Morgan Stanley also revised its financial projections for Qualcomm:

  • FY2027 Revenue Estimate: Increased to $46 billion from $41 billion.
  • Adjusted EPS Estimate: Raised to $10.45 from $9.84.

These upward revisions underscore a renewed confidence in the company's profitability and growth trajectory. The report concludes that opportunities in the data center sector are emerging as a critical new growth pillar for Qualcomm, advancing at a faster clip than previously anticipated.