Key Takeaways
- Shares of Qualcomm declined 1.86% Monday, closing at $221.90, with an additional 0.72% drop in extended trading
- The chipmaker is reportedly in late-stage negotiations to purchase Modular Inc., an AI developer platform, for approximately $4 billion
- Modular’s most recent valuation stood at $1.6 billion following a $250 million capital raise in September 2024
- A formal announcement could come within the next few weeks
- This news follows earlier reports suggesting Qualcomm is simultaneously pursuing AI chip maker Tenstorrent for $8–10 billion
Qualcomm’s shares have experienced significant appreciation recently. Over the last three months, the stock has surged 72% as market participants anticipate the company’s artificial intelligence strategy, particularly ahead of its investor presentation scheduled for Wednesday.
However, that upward trajectory stalled on Monday. QCOM finished the regular session down 1.86% at $221.90, before sliding another 0.72% during after-hours activity amid broader weakness across technology stocks.
The decline occurred despite Bloomberg’s report that Qualcomm has entered advanced discussions to purchase Modular Inc., a startup focused on AI development platforms, for roughly $4 billion. An official announcement is anticipated in the upcoming weeks.
Chris Lattner and Tim Davis, two former Google engineers, established Modular in 2022 after becoming dissatisfied with the disjointed nature of AI infrastructure. Their company creates software solutions that enable developers to implement AI models across various hardware configurations and cloud environments through a consolidated framework.
This addresses a significant challenge in the industry. Ensuring AI operates efficiently across diverse chip architectures and computing systems represents a substantial obstacle for developers, and Modular has strategically positioned itself to tackle this issue.
Rapid Valuation Growth
Modular’s financial trajectory is noteworthy. The startup secured $250 million during a September 2024 funding round, achieving a $1.6 billion valuation at that time. The reported $4 billion acquisition price would mark a greater than 2.5-fold increase in less than two years.
Neither Qualcomm nor Modular have provided official statements in response to inquiries about the potential transaction.
A Broader M&A Strategy
The Modular negotiations represent just one component of Qualcomm’s acquisition strategy. Shortly before Bloomberg’s reporting, The Information revealed that Qualcomm is simultaneously pursuing discussions to acquire Tenstorrent, an AI chip startup, for a sum between $8 billion and $10 billion.
Should both transactions materialize, Qualcomm would be executing a comprehensive expansion into artificial intelligence—addressing hardware capabilities through Tenstorrent while strengthening software infrastructure via Modular.
Market watchers are anticipating Qualcomm’s Wednesday investor presentation for additional clarity. The semiconductor company is expected to disclose the identity of a significant customer for its custom data-center chip offering and provide details on its upcoming processor development plans.
According to Benzinga Edge rankings, Qualcomm maintains a momentum score in the 89th percentile, while its growth score ranks in the 43rd percentile.
QCOM ended Monday’s trading session at $221.90.
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