Nvidia targets Qualcomm's AI strategy with RTX Spark launch

Nvidia's late-May RTX Spark launch marks the first time the GPU giant has moved aggressively into AI PC silicon territory that Qualcomm's Snapdragon X processors have largely owned.

While Nvidia came forward with a well-outlined roadmap for PCs, Qualcomm's counter to its Dragonfly AI data centre offering has generated more doubts than answers.

By launching the Dragonfly brand, Qualcomm has positioned itself firmly in the AI infrastructure segment amid the success of its custom ASICs. The idea here is simple convince the investors that there is a way to earn high margins without being dependent on any handset licensing revenues or any smartphone-related chipset cycle. However, the lack of clarity is evident.

The company's June 24 briefing is now the immediate catalyst to watch. The consensus view on growth at Qualcomm sees revenues hitting $48.8 billion with profits at $11 billion, implying annual revenue growth of about 3.1% along with $1 billion incremental profits on top of $9.9 billion in current profits.

On the other hand, some forecasts see no revenue growth beyond $42.5 billion, with profits just above $10.2 billion, a more likely scenario due to competition from Nvidia along with the gradual erosion of Qualcomm's client relationships from OEMs' in-house chip development activities.