Qualcomm $QCOM and Nvidia $NVDA: What Earnings Sentiment Says Now

Let's talk about the two semiconductor names retail traders cannot stop yelling about this week: $NVDA and $QCOM. Nvidia just hit its first all-time high since last May, tacking on more than 1% at Monday's open, while Qualcomm popped roughly 1.5% in pre-market after locking in a multi-year patent cross-licensing deal covering Huawei's logic folding chip technology, plus 5G and AI. Bloomberg's Stock Movers coverage flagged both moves, and the social sentiment crowd is treating this like the starting gun for a semiconductor earnings supercycle.

The bull case writes itself. Nvidia's server assembly partner Hani reported better-than-expected quarterly revenue, which the market is reading as a direct signal that global AI infrastructure spending is not slowing down. Tom Lee of Fundstrat, who has been right enough times to keep his CNBC badge, is calling out excessive pessimism in the market and says tech and crypto are already pricing in weaker inflation ahead. If he's right and the 10-year yield normalizes below 5% over the next six months, the multiple expansion case for high-growth semis gets a lot easier to make.

Here's where it gets complicated, though. Jason Trennert of Baird Strategies told CNBC this week that we may be at peak earnings growth, not peak earnings. His S&P 500 target sits at 8,140 (we're at 7,722 as of Friday), but he's specifically worried that multiples haven't fully digested the new reality of a 5.24% 10-year Treasury yield. That matters a lot for Nvidia, which trades on a story about future earnings that becomes harder to justify the longer rates stay elevated. Qualcomm has a different profile, more value-ish, more patent-revenue-protected, but it's still a growth stock in a rate-sensitive market.

The Qualcomm-Huawei deal also comes with an asterisk the size of a regulatory filing: it's subject to US FTC review. Given the current geopolitical climate (hello, US-Iran war and associated sanctions activity), anything touching Chinese tech partnerships is going to spend time in Washington's waiting room. Retail sentiment is pricing in a clean approval. Washington rarely offers clean anything.

Meanwhile, the Nasdaq closed up 1.19% on Friday and the VIX is sitting at a remarkably chill 16.39 despite active Middle East conflict. The market is essentially saying: we've seen this movie, and the ending is fine. Retail traders in the earnings-spotlight crowd agree, and they're positioned accordingly, long and loud on semis.

The wild card is whether AI infrastructure demand is strong enough to carry both names through a print that justifies current prices. Nvidia is priced for perfection and Qualcomm is priced for a deal that might not close. That's a fun combination going into earnings season.