Count Qualcomm (QCOM) among the mature technology companies that have garnered new favor among investors by way of the artificial intelligence (AI) trade. Specific to the California-based semiconductor producer, it’s captivating investors with its fast-growing data center chip business.
Owing to booming data center demand — a theme analysts view as durable for at least a few more years — short-term traders may find plenty of occasions to make use of the Direxion Daily QCOM Bull 2X ETF (QCMU). It is worth noting that some market observers believe that Qualcomm’s data center chip business is still in a “show me” stage, implying that traders may also want to monitor the Direxion Daily QCOM Bear 1X ETF (QCMD).
Both ETFs debuted last November. QCMU attempts to deliver 200% of the daily performance of Qualcomm shares while the bearish — though not leveraged — QCMD seeks returns corresponding with the daily inverse performance of the tech stock. Both Direxion ETFs could be useful to tactical traders in the back half of 2026.
See more: Direxion’s New ETFs Focus on Qualcomm and Cisco
Sizing Up Qualcomm Data Center Biz
Qualcomm recently held an investor event, providing details on its data center chip unit. During the event, the company told investors that it expects $40 billion in nonhandset chip revenue in fiscal 2029 on adjusted earnings per share of $18. There was also some hinting at significant news, indicating that QCMU could come into play later this year. However, that doesn’t eliminate the case for QCMD as a potential short-term hedge.
“Qualcomm hinted at big news coming within this event. We view the technological announcements as substantial, but not mind-blowing. The company’s data center revenue forecast from these products was better than we expected,” noted Morningstar’s Brian Colello.
Qualcomm’s hyperscaler relationships have increasingly drawn investors to the stock. More clarity and growth on that front are what generate the headlines that drive momentum traders toward ETFs like QCMU.
“Two hyperscale customers will exceed $1 billion in fiscal 2027, which intrigues us, as Qualcomm’s server CPU deal with Meta is presumably not included, since it will ramp in the second half of 2028. Microsoft and Google presented at the event, and perhaps these are the two immediate customers,” added Colello.
Looking further out, Qualcomm probably won’t be wresting the crown as the dominant data center chip provider from a well-known competitor, but even modest market share gains could boost the stock and, potentially, QCMU.
“Although Qualcomm will likely exceed our prior expectations for its data center business over the next few years, we don’t anticipate it will usurp Nvidia’s wide moat or early-mover advantage in AI. Still, taking a sliver of this massive AI computing opportunity bodes well for earnings growth,” concluded Colello.
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