Nvidia Stock Tries for a Record. What Qualcomm’s AI Chip Entry Means for the Stock.

Nvidia chips are the favored choice for artificial-intelligence systems. (Courtesy Argonne National Laboratory)

Key Points

• Nvidia shares rose 0.7% to $192.86 in premarket trading, nearing its record closing high of $192.57.
• Qualcomm entered the AI chip market with its AI200 and AI250, but analysts question their competitiveness against Nvidia and AMD.
• Nvidia maintains a significant advantage with its CUDA software, despite new competition and potential market share shifts.

Nvidia was rising Tuesday as investors gauged the competitive threat posed by Qualcomm’s artificial-intelligence chips and digested a flurry of announcements at the company’s conference in Washington, D.C.

In afternoon trading, Nvidia shares were up 3.3% at $197.79, on track for a record closing high. Among other chip makers, Advanced Micro Devices was up 0.2% and Broadcom had risen 2.4%.

One factor affecting the sector is Qualcomm’s entry into the AI chip market, announced on Monday. Qualcomm’s AI200 will start shipping next year followed by the AI250 in 2027, with the first customer being Humain, an AI company established by the Kingdom of Saudi Arabia’s Public Investment Fund.

However, it isn’t clear whether Qualcomm’s products are likely to gain traction with the major cloud-computing companies that are fueling business for Nvidia.

“The specifications for Qualcomm’s products seem to be much lower than those of Nvidia and even AMD,” wrote Melius Research analyst Ben Reitzes in a research note. “The key for Qualcomm from here is whether any other non-Sovereign customers will be interested, indicating broader adoption.”

Nvidia is already facing multiple competitive challenges. Broadcom said last month it expects clients to make more use of its hardware in the future at the expense of Nvidia’s graphics-processing units.

Wall Street analysts are generally backing Nvidia to remain the leader even if it loses some of the roughly 90% market share it owns. Nvidia has a key advantage, which is that developers are familiar with its CUDA software.

“While Qualcomm have one of the key ingredients to be successful in making AI chips (chip designers), they still have to buildout/mature their software stack and their networking capability to be competitive vs the leader Nvidia and fast follower AMD,” wrote BNP Paribas senior analyst David O’Connor in a research note.

Nvidia is hosting its GTC event in the nation’s capital from Monday through Wednesday.

In his keynote address, CEO Jensen Huang announced several of new partnerships and technologies—including a new interconnect technology for quantum computing and an agreement with Uber to build a 100,000 robo-taxi fleet.

Huang also said Nvidia now has visibility on more than $500 billion of cumulative revenue for its current Blackwell AI chips and future Rubin chips through 2026.

The address comes as President Donald Trump is visiting Asia and is expected to meet Chinese leader Xi Jinping on Thursday. Potential sales of U.S.-made AI chips to China is expected to be on the agenda.

Write to Adam Clark at adam.clark@barrons.com