Qualcomm shares jumped more than 2% in premarket trading Tuesday after Wells Fargo projected the chipmaker could generate $5 billion to $7 billion in annual revenue from data center AI chips starting in 2027. The San Diego-based company, seeking growth beyond its stagnating smartphone market, unveiled two AI chips for data centers last year.

Wells Fargo analysts upgraded Qualcomm to Equal Weight with a $150 price target, citing the company's push into AI inference workloads as underappreciated by investors. The brokerage highlighted Qualcomm's AI200 and AI250 platforms, which are designed for memory-intensive tasks like long-context models and video diffusion workloads. The firm also noted Qualcomm's partnerships with HUMAIN and Adobe for image and video generation applications.

Wells Fargo pointed to Qualcomm's recent acquisitions of Alphawave Semi and Ventana as key to its evolving data center strategy. Alphawave brings memory and connectivity intellectual property, while Ventana's Veyron V2 CPU architecture could enable custom server-class platforms. The brokerage also cited Qualcomm's advanced wafer allocation at Taiwan Semiconductor Manufacturing Co. as a potential advantage, allowing the company to redirect capacity from weaker smartphone demand toward data center products. Wells expects fiscal 2027 data center revenue to ramp materially, with possible hyperscale customer announcements in the first half of 2026 as potential catalysts.