Qualcomm (NASDAQ: QCOM) stock hasn't exactly set the market on fire this year as compared to some other illustrious names in the semiconductor industry. Shares of the chipmaker are down 26% since hitting a 52-week high on June 18 as of this writing.

Investors looking to buy a potential AI winner trading at a reasonable valuation should consider taking a closer look at this company.

Nvidia ( NVDA -3.26%) first disclosed a stake in fellow semiconductor company Arm Holdings ( ARM -5.59%) in the fourth quarter of 2023. The position was valued at $147 million at the time, but a recently filed Form 13F shows the position is now worth more than $280 million and accounts for about 65% of Nvidia's $433 million stock portfolio.

Artificial intelligence (AI) has turned out to be one of the key reasons behind the healthy growth of the semiconductor industry. The proliferation of this technology has driven an increase in demand for multiple types of chips ranging from application-specific integrated circuits (ASICs) to processors to memory.

Is now the right time to invest in a top AI player? Let's explore the risks and rewards of buying this market darling in the fall of 2024.

The AI-driven software company has several key qualities that make it positively stand out from other companies in the AI space, including top-quality ones, such as Nvidia.