Qualcomm is in talks to acquire Tenstorrent, an artificial intelligence chip startup, at a valuation between $8 billion and $10 billion, according to a report. The talks remain ongoing, and the final price could change or the deal could fall apart. The potential acquisition would strengthen Qualcomm's push into AI and data center chips as it works to diversify beyond its core business of smartphone and personal computer processors. The move follows Qualcomm's $2.4 billion purchase of Alphawave Semi and reflects rising consolidation in AI hardware.
Qualcomm Discusses $8-10 Billion Tenstorrent Acquisition
The two companies have discussed a valuation range between $8 billion and $10 billion, reported The Information. It is not yet clear whether any agreement would include performance-based milestone payments. Qualcomm could also consider a mix of cash and stock for the deal.
The San Diego-based chipmaker previously acquired Alphawave Semi for $2.4 billion to improve data transmission technology between chips.
Wells Fargo Raises Qualcomm Price Target to $230
Wells Fargo raised its price target on Qualcomm to $230 from $160, implying nearly 5% upside from its last close. It kept an 'Equal Weight' rating ahead of the company's Investor Day on June 24, according to TheFly.
Wells Fargo said Amazon.com, Inc.'s cloud unit Amazon Web Services is likely Qualcomm's key hyperscale ASIC partner, adding that AWS already offers the AI100 Ultra. It said that pricing checks look relatively strong versus other GPU offerings and sees Investor Day as a potential positive catalyst. Still, it flagged a key risk: whether Qualcomm's near-memory processing design can stand out in a fast-moving AI chip market.
Tenstorrent Raises Over $1 Billion From Samsung Securities and Others
Tenstorrent designs processors that it claims can run certain AI workloads more efficiently than traditional GPUs. The startup was founded by Jim Keller, a chip architect who has worked on Apple processors and Tesla's Autopilot hardware.
The company had previously explored raising funds at a valuation of around $3.2 billion, though it is unclear whether that round was completed. It has raised over $1 billion from investors including Samsung Securities, Fidelity, AFW Partners and Eclipse Ventures, reported The Information.
Tenstorrent has also drawn early acquisition interest from Intel, according to a Bloomberg report in May.
QCOM Stock Gains 4.29% in Monday Trading
The QCOM stock ended Monday's regular session up 4.29%, before slipping 0.7% in after-hours trading at the time of writing.
On Stocktwits, retail sentiment for QCOM was 'neutral,' unchanged in the past one week, while message volume was 'high.' In the past 30 days, the watcher count for QCOM rose by 1.6%, while message volume surged 200% during the same period.
The QCOM stock has gained over 40% in the past 12 months.
FAQ
What valuation is Qualcomm discussing for Tenstorrent?
Qualcomm and Tenstorrent have discussed a valuation range between $8 billion and $10 billion. The talks remain ongoing, and the final price could change or the deal could fall apart.
Who founded Tenstorrent?
Tenstorrent was founded by Jim Keller, a chip architect who has worked on Apple processors and Tesla's Autopilot hardware. The company has raised over $1 billion from investors including Samsung Securities, Fidelity, AFW Partners and Eclipse Ventures.
What did Wells Fargo say about Qualcomm stock?
Wells Fargo raised its price target on Qualcomm to $230 from $160 and kept an 'Equal Weight' rating ahead of the company's Investor Day on June 24. It said Amazon Web Services is likely Qualcomm's key hyperscale ASIC partner and sees Investor Day as a potential positive catalyst.
