Qualcomm Stock Slips After Musk Denies SpaceX AI Device Used Snapdragon Chips, Wiping Out Day's Gains

Qualcomm shares closed lower Tuesday after an unusual sequence of intraday events left the stock down more than 1.5% on the day, whipsawed by a Wall Street Journal report suggesting SpaceX had built a prototype device using its Snapdragon chips, followed by a swift denial from Elon Musk that wiped out a sharp midday rally and sent the stock back into negative territory before the closing bell.

Shares of the San Diego-based wireless chipmaker closed at $181.92, down $2.87, or 1.55%, marking the fourth consecutive session of losses for a stock that has been under sustained pressure from a combination of investor rotation out of technology names, removal from key Russell growth indexes and lingering questions about how quickly the company can ramp its newly announced data center chip business. The stock fell an additional 17 cents to $181.61 in after-hours trading.

The Wall Street Journal reported during Tuesday's session that SpaceX had a prototype of a handset-like device, sending Qualcomm shares sharply higher in intraday trading as investors speculated the Snapdragon chip family could be central to any consumer device produced by the world's most valuable startup. The gains evaporated when Musk called the WSJ story "utterly false," denying that any such device relied on Qualcomm components.

The episode added another layer of volatility to a stock that has already endured a dramatic round trip in 2026. Qualcomm reached an all-time high of $259.92 on May 29, propelled by a well-received investor day at which the company laid out an aggressive diversification strategy built around artificial intelligence and data center chips. The stock has since fallen more than 30% from that peak, closing Tuesday roughly $78 below its all-time high even as the company's fundamental business and long-term targets have not materially changed in the weeks since.

Qualcomm's 2026 Investor Day, held in late June, was the defining corporate event for the stock in recent months. The company unveiled its new Dragonfly C1000 data center central processing unit, revealed a strategic multi-generation supply agreement with Meta Platforms as the first major customer for the new chip, and told analysts it was targeting more than $15 billion in data center AI revenue by fiscal 2029, up from a smaller initial estimate, as part of a broader goal of reaching $40 billion in non-handset chip revenue by the same year. That $40 billion figure represented nearly double the company's prior projection for non-smartphone revenue and came alongside a forecast for $18 in adjusted earnings per share by fiscal 2029.

Morgan Stanley, which had previously maintained a cautious stance on the stock, turned less pessimistic following the investor day, raising its price target while describing the data center chip ambition as a potentially significant long-term growth driver even while maintaining a neutral rating overall. Bank of America raised its target to $220 from $195, UBS lifted its target to $235 from $170 and RBC Capital raised its estimate to $250 from $175 following the same event. Benchmark maintained a buy rating with a $300 price target. Mizuho raised its target to $210 from $170. The average 12-month price target across analysts covering the stock now sits at approximately $215, implying meaningful upside from current levels.

Those targets were set before Qualcomm's stock declined so sharply from its May highs, a retreat driven in part by a broader rotation out of semiconductor and technology names that has pressured many high-multiple chip stocks in June. Qualcomm was also removed from several Russell growth and defensive indexes, reducing automatic buying pressure from passive and index-tracking institutional investors who had previously been required to hold shares in proportion to the company's index weighting.

The company's most recent quarterly results, covering the fiscal second quarter, showed continued momentum in its diversification strategy even as the broader handset market remained subdued. Qualcomm reported revenue of $10.60 billion against analyst estimates of $10.59 billion, with adjusted earnings per share of $2.65 beating the consensus estimate of $2.55 to $2.56. Automotive revenue surged 38% year-over-year to $1.3 billion, while Internet of Things revenue grew 9% to $1.7 billion, both segments central to the company's push to reduce its dependence on smartphone chip sales, which have faced pressure from customers, including Samsung and Apple, exploring alternatives to the Snapdragon lineup for some of their devices.

Google reportedly selected MediaTek rather than Qualcomm or Broadcom to help build its next-generation TPUv9 artificial intelligence chip, known internally as Triggerfish, according to reporting from GF Securities, a development that dampened some of the enthusiasm surrounding Qualcomm's data center ambitions even as the company has sought to position itself as a credible alternative to Nvidia's dominant GPU-centric approach to AI inference computing.

Qualcomm's next earnings report is scheduled for August 5, when the company is expected to provide its first detailed guidance update since the investor day and give analysts a clearer read on how the Meta Platforms supply agreement and the Dragonfly C1000 data center chip are progressing toward meaningful commercial revenue. Third-quarter guidance for automotive revenue pointed to 50% year-over-year growth, suggesting that segment at least remains on a sharply positive trajectory even as the data center opportunity requires more time to develop.

The stock's current price-to-earnings ratio of approximately 13.7 times trailing earnings has drawn attention from value-oriented investors who view the multiple as low relative to the growth profile the company is projecting for 2029, particularly if the data center chip program delivers even a fraction of the revenue targets management outlined at the investor day. The company also maintains a 23-consecutive-year streak of dividend increases, with its current yield of approximately 1.94% providing income support for holders waiting for the stock's recovery from its post-peak slide.