Qualcomm shares surged after the company announced its entry into the AI data center market, unveiling two new AI accelerator chips aimed at challenging Nvidia and AMD. The move was accompanied by a major partnership with Saudi Arabia–based HUMAIN, which plans a large-scale deployment of Qualcomm’s AI infrastructure starting in 2026. Analysts viewed this development as a meaningful step toward diversifying Qualcomm’s business beyond smartphones, driving strong investor enthusiasm as the shares gained 11.09% on the news.
From a Point & Figure (P&F) technical perspective, QCOM shares have been relative underperformers, but the recent action marked a much-needed improvement. Within the SIA NASDAQ 100 Index Report, shares rose 7 positions yesterday and 28 spots over the past quarter to settle at #43 in the neutral zone today. A long-term 5% P&F chart illustrates how QCOM has historically been range-bound between approximately $100 and $170 (green shaded box). The breakout to $215 last summer may have represented the true escape from that range, followed by a retracement to $125 before buyers regained control.
As shares again approached resistance at $177.42, QCOM moved higher on a relative basis into the neutral zone. On this 5% chart, initial support sits at the 3-box reversal level of $153.26, with additional support near $168.97. Should shares experience renewed volatility, $120.09 remains an important support level, while $100 represents a key psychological floor. Resistance now stands at $226.44 on the long-term P&F chart, with an extended target of $318.63 based on both vertical and horizontal P&F counts.
To further determine near-term support and resistance, the 2% P&F chart analysis confirms support at $173.62 and $157.26, with resistance at $207.50 and $224.60. What stands out on this chart is the emerging Cup and Handle formation, a hallmark pattern introduced by William J. O’Neil, founder of Investor’s Business Daily and author of How to Make Money in Stocks. The pattern appears as a U-shaped cup followed by a short, downward-sloping handle, typically forming over long durations as a consolidation within an uptrend. A breakout above the handle’s resistance is often interpreted as a potential continuation of prior momentum. Considering this potential O’Neil setup, QCOM was analyzed through his CANSLIM model using ChatGPT, and the findings were notable.
The CANSLIM strategy, developed by William J. O’Neil, is a growth-investing framework that identifies fundamentally strong companies showing technical strength and institutional support. It focuses on seven key traits: 'C' for current quarterly earnings growth (ideally +25% or more year-over-year), 'A' for consistent annual earnings increases, and 'N' for new products, services, or catalysts driving demand. 'S' examines supply and demand dynamics, rewarding companies with rising trading volume or reduced share float. 'L' highlights leadership in price performance compared to peers, while 'I' looks for growing institutional sponsorship from reputable funds. Finally, 'M' emphasizes market direction, suggesting investors act only when the broader market is trending upward. Together, these criteria help identify stocks positioned for potential strength within favorable market conditions.
Applying CANSLIM to Qualcomm (QCOM) shows alignment across most factors:
C – Current earnings: the latest quarter delivered roughly +20–25% EPS growth with solid revenue and automotive momentum.
A – Annual growth: multi-year earnings trends are improving, with upward revisions tied to AI and data center expansion.
N – New product/catalyst: the launch of AI200 and AI250 chips and the HUMAIN partnership represent significant growth drivers.
S – Supply and demand: trading volume more than doubled on the news, supported by ongoing share buybacks that tighten supply.
L – Leader or laggard: QCOM’s relative strength has turned upward, suggesting an emerging leadership role within semiconductors.
I – Institutional sponsorship: ownership by major funds remains strong and continues to rise.
M – Market direction: with the Nasdaq and semiconductor sector trending positively, the environment supports potential continuation.
Overall, QCOM potentially meets nearly all CANSLIM criteria, with sustained EPS acceleration being the key factor to monitor in upcoming quarters.
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