Does Qualcomm (QCOM) Have the Flexibility to Capitalize on AI Opportunities?

Soumya Eswaran Wed, May 20, 2026 at 9:07 AM EDT 3 min read **

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Sound Shore Management, an investment management firm, has released its investor letter for the first quarter of 2026. A copy of the letter is available to download here. In Q1 2026, the Sound Shore Fund Investor Class (SSHFX) and Institutional Class (SSHVX) declined 3.45% and 3.43%, respectively, compared to the S&P 500’s -4.33% return and the Russell 1000 Value Index’s 2.10%. The letter highlighted the Fund’s 35 years of annualized returns of 10.43% and 10.69% for SSHFX and SSHVX, respectively, as of March 31, 2026, compared to 10.65% and 10.05% returns for the indexes, respectively. Following a strong 2025, the US market faced its most challenging first quarter since 2022, influenced by geopolitical tensions and shifting sector dynamics, highlighted by a notable shift away from leading technology and AI stocks, while the energy sector benefited from a rise in commodity prices. The Fund believes its portfolio is strategically aligned with emerging trends that will generate long-term value for investors. Please review the Strategy’s top five holdings to gain insights into their key selections for 2026.

In its first-quarter 2026 investor letter, Sound Shore Fund highlighted stocks like QUALCOMM Incorporated (NASDAQ:QCOM). QUALCOMM Incorporated (NASDAQ:QCOM) is a semiconductor and communication technology company focusing on the development and commercialization of foundational technologies for the wireless industry. On May 19, 2026, QUALCOMM Incorporated (NASDAQ:QCOM) closed at $195.61 per share. One-month return of QUALCOMM Incorporated (NASDAQ:QCOM) was 50.74%, and its shares gained 29.28% over the past 52 weeks. QUALCOMM Incorporated (NASDAQ:QCOM) has a market capitalization of $206.17 billion.

Sound Shore Fund stated the following regarding QUALCOMM Incorporated (NASDAQ:QCOM) in its Q1 2026 investor letter:

"Leading semiconductor supplier QUALCOMM Incorporated** (NASDAQ:QCOM) is one example that was down with the sector. Long known for its mobile chip technology, there is short-term concern that the surge in memory prices will slow the cell phone market. And while this segment is maturing, Qualcomm is rapidly diversifying its business as its robust developer tools facilitate AI functionality in new markets and is driving adoption of QCOM chips. Meanwhile, the company is growing in diverse end markets such as automotive, internet of things and data centers. With its profitable mobile and licensing businesses and a strong balance sheet, we believe Qualcomm has the strategic flexibility to execute on the AI opportunity ahead."

** Story Continues Analyst Explains Why He’s Buying Qualcomm (QCOM) Despite Facing Hopes of Cellphone ‘Super Cycle’ QUALCOMM Incorporated (NASDAQ:QCOM) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 78 hedge fund portfolios held QUALCOMM Incorporated (NASDAQ:QCOM) at the end of the fourth quarter, up from 63 in the previous quarter. In the second quarter of fiscal 2026, QUALCOMM Incorporated (NASDAQ:QCOM) reported revenues of $10.6 billion and non-GAAP earnings per share of $2.65. While we acknowledge the potential of QUALCOMM Incorporated (NASDAQ:QCOM) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock**.

In another article, we covered QUALCOMM Incorporated (NASDAQ:QCOM) and shared top tech stocks in billionaire Ken Fisher’s Portfolio. QUALCOMM Incorporated (NASDAQ:QCOM) was the largest performance detractor of Aristotle Value Equity Strategy in Q1 2026. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.