Morgan Stanley Upgrades Qualcomm After $5B Data Center Forecast

Morgan Stanley upgraded Qualcomm (NASDAQ: QCOM) from Underweight to Equal-weight and raised its price target to $231 from $146 in a client note on Thursday. The upgrade comes after Qualcomm's investor day, where the chipmaker revealed a $5 billion data center revenue forecast for fiscal 2027, which the bank said "clearly pushes them into the AI beneficiaries category."

Rating Change

• Previous Rating: Underweight
• New Rating: Equal-weight
• Previous Price Target: $146
• New Price Target: $231

Analyst Rationale

Morgan Stanley analysts believe Qualcomm's $5 billion data center revenue forecast for fiscal 2027 "clearly pushes them into the AI beneficiaries category." This strategic shift makes Qualcomm a more significant player in the growing AI market, justifying the upgrade and higher price target.

Context

The upgrade comes as Qualcomm seeks to diversify its revenue beyond smartphones, focusing on data centers, automotive, and IoT. No other analysts have commented yet, but the stock may see positive momentum from this upgrade.

What to Make of It

The rating upgrade reflects growing optimism about Qualcomm's ability to capitalize on the AI boom, but investors should monitor whether the company can deliver on its ambitious forecasts.