Qualcomm targets AI data centers as smartphone sales drop

Qualcomm is shifting its focus toward data center chips to help boost its revenue as smartphone sales tank by around 20 percent compared to 2025. During its Q4 2026 earnings call, the company outlined its plans to enter the artificial intelligence data center market through partnerships with Amazon and Meta.

Financial Projections

Qualcomm forecasts $650 million in data center revenue during the first quarter of 2027. The company expects that figure to reach $5 billion by the end of 2027 and $15 billion by 2029. Total revenue for the company in 2026 reached $10.4 billion, meaning these projections would make up a large share of future earnings. Qualcomm confirmed it expects data centers to eventually account for roughly 30 percent of its business.

Market Comparison

While AMD projects that over 80 percent of its revenue will eventually come from data centers, Qualcomm's targets show strong demand for hardware and plenty of available AI money in the sector.

Context

Data center chips are specialized processors designed to handle the heavy computing workloads required by artificial intelligence and cloud computing. Major technology companies are heavily investing in this infrastructure to support generative AI tools and large language models.