Qualcomm spent years selling chips into phones. That business is now shrinking fast. Smartphone sales have fallen by around 20 percent compared to 2025.
On its Q4 2026 earnings call, the company laid out a different plan. Qualcomm wants a large share of the AI data center market. It already has partnerships with Amazon and Meta, both announced earlier this year.
The numbers Qualcomm put on the table
Qualcomm expects about $650 million in data center revenue during the first quarter of 2027. That figure is small next to its phone business today. The company does not expect it to stay small.
By the end of 2027, Qualcomm forecasts $5 billion from data centers. By 2029, it expects $15 billion. For context, total company revenue for 2026 was $10.4 billion.
Management confirmed one more detail on the call. Data centers should eventually account for around 30 percent of the business.
Smaller ambition than AMD, same direction
AMD has made a bolder claim. It says more than 80 percent of its revenue will eventually come from data centers. Qualcomm’s 30 percent target looks modest beside that number.
Both companies are reading the same signal. AI training and inference need enormous amounts of compute. Chipmakers that cannot supply it are watching their consumer markets slow down.
Qualcomm’s phone exposure makes the shift more urgent than it is for AMD. A 20 percent drop in smartphone sales is a direct hit to its largest revenue stream. Data center contracts take years to sign and years to scale.
The forecast assumes Amazon and Meta keep expanding their AI infrastructure. Both companies have aggressive buildout plans this year. Both also face growing local opposition to new sites across the United States.
What to watch
The $650 million first-quarter target is the number to track. If Qualcomm misses it, the 2029 figure becomes much harder to defend. If it beats it, the company has a real second business.
Investors will also watch whether phone sales stabilize. A recovery would give Qualcomm room to fund the data center push without cutting elsewhere.
Source: The Verge — Qualcomm is betting big on data centers as smartphone sales sink
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