Qualcomm Technologies, Inc. QCOM and Tata Elxsi, Inc. are set to collaborate to create virtual models of the Snapdragon Digital Chassis for cloud-native automotive application development and drive the adoption of software-defined vehicle technology. Tata Elxsi is a prominent provider of designs and technology services across several sectors, including automotive, transportation, healthcare, telecommunication and more. The partnership of QCOM and Tata Elxsi is putting a strong emphasis on the implementation of cloud-based virtualized approach for fast and efficient delivery of automotive software solutions.

SDV technology focuses on the use of software to manage vehicle operations and features, reducing reliance on the hardware framework. The technology offers several benefits and can have a transformational impact on how vehicles are developed and operated. Its versatile and scalable architecture allows for the smooth incorporation of new upgrades and the continuous evolution of in-vehicle systems. Advanced connectivity with other digital entities in surroundings, enabled by SDV, will ensure a safer and more dynamic driving experience for end users.

Qualcomm Snapdragon Digital Chassis VSoCs (virtual system on chips) will expedite the software development and validation process, lower reliance on hardware and streamline the product development lifecycles. Access to virtualized models and ready-to-adopt SDV software will enable automakers to develop the next generation of mobility solutions for passenger, commercial and off-highway vehicle markets.

Moreover, at the upcoming Consumer Electronics Show 2025, Tata Elxsi will showcase the capabilities of its AVENIR SDV integrated with QCOM’s Snapdragon Ride Flex SoC. The demonstration will focus on real-world applications such as mixed-critical workloads for infotainment and advanced driver assistance systems.

Will This Venture Drive QCOM’s Share Performance?

Qualcomm is benefiting from healthy traction in the automotive market. In third-quarter fiscal 2024, automotive revenues rose 87% to a record high of $811 million, driven by increased content in new vehicle launches with its Snapdragon Digital Chassis platform. This was the 15th consecutive quarter in which Qualcomm recorded double-digit growth in automotive revenues. The company expects automotive revenues to increase to more than $4 billion by fiscal 2026.

The buyout of Veoneer, Inc. has offered Qualcomm a firmer footing in the emerging market of driver-assistance technology, as it aims to extend the Snapdragon Ride Advanced Driver Assistance Systems (“ADAS”) portfolio. The Arriver business of Veoneer operates the dedicated software unit focused on sensor perception and drive policy, including a full stack of features and functions. With the acquisition, Qualcomm has incorporated Arriver's Computer Vision, Drive Policy and Driver Assistance assets into its ADAS portfolio to deliver an open and competitive platform for automakers to better compete with rivals within the self-driving vehicle market.

Software-defined technology has been gaining popularity among operators owing to its scalability, flexibility, cost efficiency, support for new business models and improved customer experience. Qualcomm with its Snapdragon Digital Chassis product portfolio is well positioned to capitalize on this emerging trend. Tata Elxsi works with several leading OEMs and suppliers in the automotive and transportation industry. The recent collaboration will likely boost Qualcomm’s market reach which augurs well for long-term growth.

QCOM’s Zacks Rank & Stock Price Movement

Qualcomm currently carries a Zacks Rank #2 (Buy). Shares of the company have gained 13.5% in the past year compared with the industry’s growth of 37.3%.

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Other Stocks to Consider

Keysight Technologies, Inc. KEYS sports a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.

InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.

It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.

Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.

The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.

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