For much of the AI boom, semiconductor ETFs have been driven by a handful of names led by Nvidia Corp (NVDA). But Qualcomm's growing role in edge AI is giving ETF investors another avenue to play the artificial intelligence theme as the industry expands beyond data centers.

Why Qualcomm Is Back in Focus

The renewed ETF interest comes as Qualcomm emerges as one of the biggest beneficiaries of the shift toward "edge AI," where AI models run directly on smartphones, PCs, vehicles and other connected devices instead of relying solely on cloud infrastructure.

The company recently received a high-profile endorsement from Nvidia CEO Jensen Huang, who praised Qualcomm's leadership in mobile AI and told investors to "buy their stock." Qualcomm has also outlined plans for more than 40 AI-powered device designs while expanding into data-center CPUs through a partnership with Meta Platforms, Inc (META).

Which ETFs Stand to Benefit?

The biggest beneficiaries could be diversified semiconductor funds such as VanEck Semiconductor ETF (SMH), iShares Semiconductor ETF (SOXX) and First Trust Nasdaq Semiconductor ETF (FTXL), all of which count Qualcomm among their notable holdings. According to ETF Database, Qualcomm ranks among the top 15 holdings in more than 50 U.S.-listed ETFs, extending its influence well beyond dedicated chip funds.

SMH, with roughly $69.28 billion in assets, is the industry's largest semiconductor ETF and is known for its concentrated exposure to mega-cap chipmakers. While Nvidia remains its largest holding at 20%, a stronger Qualcomm could help diversify the fund's AI-driven returns if investors begin rewarding companies that enable AI inference rather than just AI training. Currently, QCOM has a little more than 4% weight in the fund.

SOXX offers a more balanced portfolio, capping individual holdings to reduce concentration risk. That structure allows investors to participate in gains across a broader range of semiconductor companies, making Qualcomm's potential rerating more meaningful to the fund's overall performance.

Meanwhile, FTXL uses a factor-based approach to select semiconductor stocks. Instead of simply allocating more weight to the largest chipmakers, the fund tracks an index that selects and weights U.S. semiconductor companies using a multifactor methodology based on volatility, value and growth characteristics. That approach gives investors diversified exposure to companies such as Qualcomm while reducing concentration in a handful of mega-cap names, potentially allowing emerging AI winners to have a greater impact on performance.

Analysts See a Multi-Year Growth Runway

Wall Street has grown increasingly bullish following Qualcomm's Investor Day. Benchmark reiterated its Buy rating and maintained a $300 price target, while UBS, Rosenblatt, Mizuho and Susquehanna all lifted their estimates after the company unveiled long-term AI and data-center targets, while keeping their respective ratings unchanged.

Moreover, Counterpoint Research recently said Qualcomm is emerging as one of the few semiconductor companies with the capability to deliver end-to-end AI infrastructure, spanning both hyperscale data centers and edge devices.

Management expects data-center revenue to reach roughly $5 billion by fiscal 2027 and exceed $15 billion by fiscal 2029, reflecting its ambition to become a broader AI infrastructure company rather than simply a smartphone chip supplier.

For ETF investors, that evolution matters. If Qualcomm emerges as the next major AI winner alongside Nvidia, semiconductor ETFs could become less reliant on a single stock and benefit from broader leadership across the chip industry.