Qualcomm's stock surged 7.71% during intraday trading on Tuesday, significantly outpacing earlier pre-market gains as the semiconductor sector rallied broadly.

The sharp rise was fueled by a specific report that Qualcomm struck an AI chip deal with TikTok owner ByteDance, which is set to procure millions of Qualcomm's application-specific integrated circuits (ASICs). This news builds on existing investor enthusiasm for Qualcomm's strategic moves in the AI data center market, including its re-entry into the server CPU space with a custom Arm-based chip for Meta and collaborations with industry leaders.

Broader market sentiment also provided a tailwind, with the entire semiconductor sector advancing on continued AI optimism and reports of progress in U.S.-Iran peace talks, which eased geopolitical concerns and boosted risk appetite. The Philadelphia Semiconductor Index hit a record high intraday.