The AI trend still has room to run. Companies continue to spend on developing AI programs, and hardware companies are rushing to meet the demand. So are power companies, given the high power requirements for AI programs.
But except for Apple (AAPL) creating a hybrid product for its iPhone, AI has yet to go fully mobile. It will take a new and ultra-advanced chip design to make that happen. One company can deliver on that concept.
The player? Qualcomm (QCOM). Their chips are in nearly every smartphone today, and the company’s library of patents allows it to dominate communications chips. Creating chips that can play to mobile AI needs could mean big returns for investors.
Qualcomm is up 25% over the past year, but down 33% from its summer highs. Growth has been solid, thanks to its position in the smartphone market. AI growth for mobile chips could supercharge those returns, and ensure Qualcomm retains its dominance over the next decade.
Action to take: Shares look like a reasonable value here at 14 times forward earnings following the summer pullback. Plus, shares pay a 2.1% dividend at today’s prices.
For traders, shares look ready to trend higher after flatlining following their summer selloff. The March 2025 $200 calls, last trading for about $2.05, could deliver high double-digit returns for today’s buyers on a trend higher into early next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.