Will Qualcomm Lose Market Share to MediaTek in the Mobile Phone Market?

The artificial intelligence (AI) chip boom has fueled a 5-month-long rally in Taiwan’s MediaTek Inc (MDTKF).  The stock is up more than +40% since the end of June and is up +51% so far this year, much better than the +2% gain in the Philadelphia Stock Exchange Semiconductor Index ($SOX) and the +7% gain in U.S. rival Qualcomm (QCOM).  The sharp rally in MediaTek has been fueled by robust demand for mobile devices that utilize the company’s AI chips. 

The craze surrounding MediaTek is its use of AI to grab a larger share of the smartphone business. MediaTek’s new Dimensity 9300 chip is seen as a game-changer that will help it grab market share from Qualcomm in the high-end mobile market.  Analysts have boosted estimates for MediaTek’s earnings per share by +13% since the end of July, while short interest on the stock has fallen from a high in June.  Analysts have also boosted their price targets on MediaTek by +27% from a July low.