Qualcomm (QCOM) stock surged over 12% on Monday following reports of a potential partnership with OpenAI to develop processors for an AI-focused smartphone. The stock closed at $148.85 before advancing to $166.45 in pre-market trading, reaching its highest point since January 2026.
The report by TF International, citing renowned analyst Ming-Chi Kuo, claims that OpenAI has selected Qualcomm and MediaTek as processor co-development partners for its planned AI smartphone. Luxshare would serve as the exclusive system design and assembly partner. Mass production could begin as early as 2028, with specifications and supplier choices potentially finalized by late 2026 or early 2027.
Kuo stated: "Only by fully controlling both the operating system and hardware can OpenAI deliver a comprehensive AI agent service." The project targets a market segment of approximately 300-400 million annual shipments.
The AI smartphone would center on an AI agent model rather than a traditional app-based interface, combining on-device AI with cloud processing. Local models would handle real-time context and memory control, while heavier tasks move to cloud systems to preserve battery life.
Despite the bullish sentiment, Qualcomm faces earnings pressure ahead of its Wednesday financial results. Analysts expect Q2 revenue to drop 2.36% to $10.6 billion, with EPS declining from $2.85 to $2.56. The stock also risks filling the gap formed during Monday's surge, potentially declining to the $135 support level.
