Qualcomm (QCOM) Slides 3% as Chip Sector’s AI Boom Leaves It Behind

As of 1:00 p.m. ET on Thursday, July 3, Qualcomm (QCOM) was down 3.10% in midday trading at $176.28, a drop of $5.64 from the prior session’s close of $181.92. The stock opened at $182.18, hit a high of $185.80, and sank to a low of $172.12. The decline comes even as the broader semiconductor sector surges on a wave of AI infrastructure investment, highlighting a sharp divergence within the chip space.

Chip Sector Posts Best Quarter Ever, Qualcomm Lags

Computer-chip stocks just logged their best quarter in history, according to Axios. The Philadelphia Semiconductor Index (SOX) rose 87.8% in the three months ended June 30 — the largest quarterly gain since records began in 1994, surpassing even the dot-com era’s wildest runs.^[Axios]

The rally has been fueled by AI demand, especially for memory chips like DRAM and NAND. With supply constrained by the long lead times and high cost of building new fabrication plants, prices have surged, driving profits for companies in that segment.^[Axios]

But not every chipmaker has benefited equally. In Q2, Intel (INTC) rocketed 216.4%, AMD (AMD) gained 185.6%, and chip-equipment suppliers Applied Materials (AMAT), KLA (KLAC), and Lam Research (LRCX) all more than doubled.^[Axios] Qualcomm, by contrast, was absent from that leaderboard, its stock lagging behind.

AI Boom Fuels Divergence and Volatility

Despite the sector’s overall strength, volatility spiked in June. Chip stocks suffered a “bloodbath” early in the month, wiping out more than $1 trillion in market cap in a single day, Axios reported.^[Axios] Even big winners like Micron (MU) saw wild swings, plunging 13% one week only to surge 16% days later after earnings.^[Axios]

CNN confirmed the market’s jitters. The S&P 500 fell about 1% in June, snapping a two-month winning streak, while the tech-heavy Nasdaq dropped 2.8%.^[CNN] Investors are increasingly focused on how Big Tech will monetize its massive AI infrastructure spending. Microsoft (MSFT) fell 17% in June — its worst month since the dot-com bust in 2000 — and Oracle (ORCL) dropped 35%, its worst month since 1990.^[CNN]

Software & Services Crushed, Semiconductors Win Big

MarketWatch noted that the S&P 500’s worst performers in the first half of 2026 were concentrated in software and online services, as investors fretted over AI-driven disruption to those business models.^{[MarketWatch]} Intuit (INTU) fell 61%, CoStar Group (CSGP) dropped 58%, and Accenture (ACN) lost 54%.^{[MarketWatch]}

In stark contrast, semiconductor and memory-chip stocks were the market’s top gainers. The chip index has surged nearly 88% since March, its best quarter since FactSet records began in 1994, per CNN.^[CNN] The S&P 500 itself rose 9.5% in the first half, with 62% of its components posting gains.^{[MarketWatch]}

Analysts Question Sustainability of AI Investment Boom

Despite the breathtaking AI-driven chip rally, analysts are divided on its staying power. Axios cited observers who argue the surge makes clear that AI infrastructure buildout is “almost certainly the largest investment boom in American history.”^[Axios] But the report also warned that such a rapid run-up has traders and investors on alert for a bust, noting that many historic investment booms have ended in crashes.^[Axios]

CNN reported that Wall Street analysts remain broadly optimistic. Barclays raised its year-end S&P 500 target in June.^[CNN] Still, the market faces headwinds from geopolitical tensions, a potential rebound in inflation, and worries that AI stocks are overvalued.

For Qualcomm, Thursday’s drop and its relative underperformance over the past year reflect a market that is currently chasing companies tied directly to AI memory and advanced-process chips. Qualcomm’s core businesses — smartphone chips and IoT — do benefit from AI trends, but its growth story is less compelling in the current narrative than those of Micron, Intel, or AMD.

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