Some AI stocks are riskier than others.Investors continue to debate whether there's a stock market bubble right now, or even more than one.The idea of there being an artificial intelligence (AI) bubble stems from the massive amounts of money going into development, while the results have yet to be seen. There are some clear winners from all the investment in AI infrastructure, but can it continue? There's some risk in investing in some of the hottest AI stocks right now, especially because a lot of them tra ...

Core Insights - Qualcomm reported fourth quarter earnings that exceeded expectations, with adjusted earnings per share (EPS) of $3.00 on revenue of $11.27 billion, surpassing analyst forecasts of $2.88 EPS on $10.77 billion revenue [1][3] - The company provided guidance for the next quarter between $11.8 billion and $12.6 billion, higher than the anticipated $11.59 billion [1] Financial Performance - Qualcomm's QCT segment generated $9.8 billion in revenue, exceeding expectations of $9.3 billion, while the QTL segment brought in $1.4 billion, meeting expectations [4] - The company incurred a one-time non-cash tax-related charge of $5.7 billion, which impacted GAAP results but is expected to lower future cash tax payments [2] Market Challenges - Qualcomm faces the risk of losing Apple as a major customer for wireless chips, as Apple is transitioning to its own custom chips for its iPhone lineup [5] - The smartphone market has slowed, affecting Qualcomm's revenue generation from smartphone chips and licensing agreements [4] Strategic Initiatives - To mitigate risks, Qualcomm is diversifying its business by entering the AI data center and PC chip markets [5] - The company recently launched its AI200 and AI250 data center chips, with availability planned for 2026 and 2027 respectively, marking its first direct competition with Nvidia and AMD [6][7]

Core Viewpoint - Qualcomm is diversifying its business by entering the AI data center market, launching new AI chips and rack-scale server products, while facing challenges in its traditional smartphone chip business [1][6][7]. Financial Performance - Qualcomm is expected to report earnings per share (EPS) of $2.85 on revenue of $10.7 billion for the upcoming quarter, compared to EPS of $2.69 on revenue of $10.2 billion in the same quarter of 2024 [4]. - The QCT segment, which includes smartphone, internet of things, and automotive businesses, is projected to generate $9.3 billion, reflecting a year-over-year increase of 7.6% [8]. - The QTL licensing segment is anticipated to bring in $1.4 billion [8]. Market Position and Competition - Qualcomm's stock rose 11% following the announcement of its new AI products, but it still lags behind competitors like Nvidia and AMD, with shares up only 8% over the past 12 months compared to Nvidia's 54% and AMD's 81% [3]. - The company is facing the risk of losing Apple as a major customer for wireless chips, as Apple is moving towards using its own custom chips [5]. Industry Trends - The AI data center market is expected to grow to approximately $114 billion by 2030, providing Qualcomm with an opportunity to diversify away from the low-growth smartphone market, which currently accounts for about 75% of its revenues [7].

Core Insights - China is intensifying its scrutiny of US chip imports, launching an antitrust investigation into Qualcomm's acquisition of Autotalks and increasing customs checks on Nvidia processors [1][3][4] Qualcomm - Qualcomm's acquisition of Israeli chip maker Autotalks is under investigation by China's market regulator for potential antitrust violations [1][2] - Qualcomm's shares fell by 1.3% following the announcement of the investigation [1][14] - The company is cooperating with Chinese regulators and emphasizes its commitment to supporting its customers and partners [2] Nvidia - China's State Administration of Market Regulation previously claimed Nvidia violated antitrust laws with its acquisition of Mellanox, aimed at enhancing data center efficiency [3] - Reports indicate that China is encouraging domestic companies to cease orders for Nvidia chips, including variants designed to comply with US export restrictions [7] - Nvidia's H20 and RTX Pro 6000D chips are considered less advanced versions tailored for compliance with US controls [12] Customs and Trade Policies - China has deployed additional customs officials at ports to inspect semiconductor shipments, aiming to identify smuggled advanced chips that violate US export curbs [4][13] - Starting October 14, China will charge US ships docking fees at its ports, coinciding with the implementation of US port fees on China [6] - Chinese authorities are reportedly working to triple domestic production of advanced semiconductors next year to reduce reliance on Nvidia [17]