The first wave of AI investments has been centered around big-tech companies providing hardware or software needed to run AI programs. The next wave is unfolding, and will create new investment opportunities elsewhere.
While the current generation of AI programs requires significant processing power, the next wave will include simpler programs that can be run on-the-go. That’s what creates new investment opportunities for investors today.
For those looking for an AI system that can run on a piece of hardware like a smartphone, communication chips are key. In the wireless chip space, Qualcomm (QCOM) looks set to expand on its dominance.
That’s leading to more upgrades from analysts, which could help Qualcomm add to its 95% return over the past year.
Even with the big rally higher, Qualcomm shares trade at 20 times earnings. Revenues are also up nearly 37% over the past year.
Action to take: Investors may like shares here, and may want to keep an eye out to buy more shares on any pullback. AI technology hasn’t quite gotten to smartphones yet, but as a leader in wireless communications patents, Qualcomm could be a big winner from here.
Shares also pay a 1.5% dividend at current prices.
For traders, the September $240 calls, last trading for about $7.55, could see high double-digit returns on a continued move higher in the coming weeks.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.