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Qualcomm Bucks AI Trend, Focuses on Data Centers and Dividends
7 Aug
Summary
- Qualcomm stock down 5% in 2025, while semiconductor ETF surges 20%
- Company diversifying beyond smartphone chips, into data centers and AI
- Qualcomm has a solid history of dividend payments to shareholders
As of August 7th, 2025, Qualcomm, a major chip manufacturer, has seen its stock decline by 5% this year, a stark contrast to the nearly 20% surge in the VanEck Semiconductor ETF (SMH). However, the company still has growth potential, and it has a solid history of making dividend payments to shareholders.
Qualcomm's business mix is shifting, as the company expects to lose its modem business with Apple in the coming years. To diversify, Qualcomm is expanding into new areas, such as powering Meta Platforms' smart glasses and growing its footprint in data centers and artificial intelligence. The company's CEO, Cristiano Amon, has highlighted data centers as a "new growth opportunity" and a "logical extension" of Qualcomm's diversification strategy.
While Qualcomm's data center push is still in the early stages, with revenues expected to begin in the fiscal 2028 timeframe, the company is engaged with multiple potential customers and is in advanced discussions with a leading hyperscaler. Analysts welcome this move, though they acknowledge that investors will need to be patient.
For income investors, Qualcomm's history as a dividend payer offers a potential reward. The company has been steadily growing its dividend payments over the past two decades, and its current dividend yield stands at 2.4%. Investors who bought Qualcomm 20 years ago and reinvested their dividends would have seen a total return of more than 480%, compared to the price return of over 270%.
