Qualcomm lands ByteDance AI chip deal, shares hit record high

Qualcomm Signs AI Chip Deal With ByteDance, Shares Surge to Record

Qualcomm reached an agreement with TikTok owner ByteDance to supply millions of AI-focused application-specific integrated circuits for the Chinese technology company’s data centers, Bloomberg News reported on Tuesday. The deal sends Qualcomm shares to a fresh all-time high, extending a rally that has seen the stock roughly double from its April lows.yahoo

A Data Center Breakthrough

The agreement marks ByteDance as one of Qualcomm’s first major customers for custom AI data center silicon, a market the San Diego-based chipmaker entered only recently. ByteDance plans to deploy the ASICs to power its AI agent software across its sprawling infrastructure. Qualcomm disclosed during its fiscal second-quarter earnings call on April 29 that it had secured its first hyperscaler customer for data center chips, sending shares up more than 13% that day. Tuesday’s Bloomberg report now identifies ByteDance as that customer.tikr

The timing aligns with ByteDance’s aggressive AI spending plans. The company boosted its 2026 AI infrastructure budget by 25% to 200 billion yuan ($29.4 billion), according to a report earlier this month citing the South China Morning Post. A larger portion of that spending is being directed toward chips that support its expanding AI capabilities.bloomberg

Qualcomm’s Pivot Beyond Smartphones

For Qualcomm, the ByteDance deal validates a strategic push beyond its core smartphone processor business into AI infrastructure — a market long dominated by Nvidia. On its April earnings call, CEO Cristiano Amon signaled that Qualcomm’s addressable market in data centers could be substantial, with the company positioning its Arm-based designs as more power-efficient alternatives to incumbent GPUs.youtube

The stock has benefited from a string of catalysts in recent weeks, including Amon joining President Trump on a trip to China in mid-May, a Daiwa upgrade to Outperform, and Tigress Financial lifting its price target to $280. The 52-week high reached $247.90 on May 11, and shares surged past that level on Tuesday following the ByteDance news.247wallst

Competitive Landscape

Qualcomm enters a crowded field. ByteDance has previously worked with Broadcom on custom chip designs, and the company allocated roughly $14 billion for Nvidia chips in 2026. The broader custom ASIC market is growing rapidly, with shipments projected to reach 27.8% of AI server volume this year, growing 44.6% year-over-year. For Qualcomm, converting its first hyperscaler deal into a broader data center business remains the central challenge analysts are watching.pcmag