Nvidia (NASDAQ: NVDA) has been dominating the stock market with its AI chips, but there’s a new contender on the horizon. Qualcomm (NASDAQ: QCOM) is positioned to challenge Nvidia’s reign with its foray into the smartphone processor market.

Qualcomm’s Evolution in the Smartphone Arena

While Nvidia holds over 90% of the AI chip market, Qualcomm is carving its path in smartphone processors. Closing in on the top spot with 28% market share, Qualcomm’s strategic focus on AI-enabled smartphones sets the stage for exponential growth.

As Qualcomm expands its reach, particularly in China, the company anticipates a surge in revenue. Recent figures indicate a substantial revenue increase with a potential 20% growth in earnings per share, showcasing Qualcomm’s momentum in the competitive smartphone chip landscape.

Bolstering its position, Qualcomm is delving into generative AI smartphones, aiming for substantial year-over-year growth. Counterpoint Research forecasts a remarkable 65% compound annual growth rate in generative AI smartphone shipments, presenting Qualcomm with an enticing opportunity to thrive in a burgeoning market.

The Attractive Valuation Proposition

As Qualcomm positions itself for success in the burgeoning AI smartphone market, investors can find solace in the stock’s valuation. With a modest price-to-earnings ratio of 24 and a forward earnings multiple of 19, Qualcomm presents an appealing investment opportunity compared to its industry peers.

As Qualcomm gears up to replicate Nvidia’s success in the AI chip realm, the stock’s trajectory indicates a compelling growth story. Analysts’ optimistic earnings growth projections further underscore Qualcomm’s potential to become a formidable player in the semiconductor domain.