Qualcomm bets on data centers as smartphone sales sink
Qualcomm reports Q4 2026 earnings as smartphone sales drop 20%, targeting $15 billion in AI data center revenue by 2029.
Stock photo for illustration only, not from the actual event
- Qualcomm smartphone sales dropped by about 20 percent compared to 2025 levels
- The company forecasts $650 million in data center revenue for the first quarter of 2027
- Revenue is projected to reach $5 billion by the end of 2027 and $15 billion by 2029
- Data center chips are expected to eventually account for 30 percent of total business
With smartphone sales tanking by around 20 percent compared to 2025, Qualcomm is actively looking to data centers to help boost its bottom line. As mobile hardware demand slows down, the company is shifting its focus toward capturing a larger share of the booming artificial intelligence infrastructure and data center market.
During its Q4 2026 earnings call, the chipmaker outlined its strategic plans to make a significant splash in the AI data center business. This expansion relies heavily on high-profile partnerships with major tech giants like Amazon and Meta, which were officially announced earlier this year to diversify revenue streams away from mobile devices.
Stock photo for illustration only, not from the actual event
The company expects this emerging segment to scale rapidly, forecasting approximately $650 million in data center revenue during the first quarter of 2027. Management anticipates that figure will climb to $5 billion by the end of 2027 before soaring to $15 billion by 2029, representing a massive shift in corporate income.
Considering that Qualcomm reported total revenue of $10.4 billion for 2026, these projected figures highlight a transformative shift in its financial makeup. Executives confirmed during the call that data centers will eventually account for roughly 30 percent of the company's entire business operations, signaling long-term commitment to enterprise infrastructure.
Qualcomm's pivot into enterprise data centers underscores a wider industry trend where traditional mobile chipmakers must diversify to offset mature smartphone upgrade cycles. By aligning with cloud hyperscalers like Amazon and Meta, Qualcomm aims to secure a lucrative foothold in the heavily funded AI hardware ecosystem.
Source: The Verge
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