Qualcomm to Issue Up to 19.2 Million Shares to Buy AI Software Maker Modular

What Qualcomm agreed to

Qualcomm, one of the largest makers of chips for smartphones and connected devices, is buying its way deeper into artificial intelligence. In a Form 8-K filed with the SEC on June 24, the company said it had entered a definitive agreement on June 21 to acquire Modular Inc, a privately held AI software company. A Form 8-K is the report public companies use to tell investors about a material event between their regular quarterly filings. The document that carries the news here is short and specific: it discloses only how Qualcomm will pay.

The answer is entirely in stock. Qualcomm expects to issue up to 19.2 million of its own shares to Modular’s owners as the price of the deal. At Qualcomm’s recent share price near $184, that block of stock is worth roughly $3.5 billion, though the exact figure floats because the company fixed a share count, not a dollar amount. The filing was signed by Akash Palkhiwala, Qualcomm’s chief financial officer and chief operating officer.

Why pay in stock

Paying with shares instead of cash has real advantages for a buyer. Qualcomm does not have to drain its cash reserves or borrow money to close a multibillion-dollar purchase. Instead it prints new shares and hands them over, which keeps the balance sheet clean but comes at a cost to existing owners: dilution. Adding 19.2 million shares to the roughly 1.05 billion Qualcomm already has outstanding spreads the company’s future profits across a little under 2% more stock, so each existing share represents a slightly smaller slice of the business.

The stock is being issued through what the filing calls a private placement, undertaken under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D. In plain terms, that means the shares are sold straight to Modular’s owners rather than to the public, so they skip the usual SEC registration and start life as restricted stock that cannot be freely resold right away. It is a common, low-friction way to use equity as an acquisition currency. Shares of Qualcomm (NASDAQ: QCOM) fell about 5% on July 2, leaving the stock near $184 and the company’s market value around $190 billion.

What still has to happen

The deal is signed but not done. Qualcomm says the acquisition is subject to customary closing conditions and applicable regulatory approvals, the standard reviews that large technology purchases must clear before they can close. The company also warns that closing purchase price adjustments could change the number of shares it ultimately issues, so the final count may land below the 19.2 million ceiling. Until then, the shares are only promised, not delivered, and the timing depends on how quickly the reviews finish. Qualcomm has said elsewhere on its investor relations site that it expects the purchase to close in the second half of 2026.

What to watch

1. The closing timeline. The agreement is signed but still needs regulatory approvals and other conditions to be met. Watch for a follow-up 8-K confirming the deal has closed and stating the exact number of shares issued, which the filing says could differ from the 19.2 million ceiling.

2. The final share count and dilution. Because purchase price adjustments can move the number, the real dilution to existing holders will only be clear at closing. A smaller count means less dilution, a larger one means more.

3. What the stock does. An all-stock deal ties the purchase price to Qualcomm’s own shares, so a falling stock quietly raises the cost of the acquisition in dilution terms. After the roughly 5% drop on July 2, watch how the market values QCOM as the closing date approaches.