Qualcomm says data center chips could reach 30% of its business

In short: Qualcomm says it expects data center chips to become a much bigger part of its business as smartphone sales fall.

What's going on

Qualcomm is best known for the chips that power many Android smartphones. But the company says global smartphone sales fell by about 20 percent compared to 2025, and it is looking for growth elsewhere.

On its Q4 2026 earnings call, Qualcomm pointed to data centers as its next major focus. A data center is basically a warehouse full of computers that run online services, like streaming, shopping, and many AI tools (think of it like the back room where the internet does its heavy lifting).

Qualcomm says it is building chips for AI work in data centers and working with big customers, including Amazon and Meta. The company forecasts about $650 million in data center revenue in the first quarter of 2027. It then projects that number could rise to $5 billion by the end of 2027 and $15 billion by 2029.

For context, Qualcomm reported total revenue of $10.4 billion for 2026. If the company hits its targets, data centers would become a meaningful slice of its overall business. Qualcomm said it expects data centers will eventually make up around 30 percent of the company.

What to watch

The key question is whether Qualcomm can actually win long-term orders in data centers, where competitors already have strong positions. Another thing to watch is how quickly demand for AI computing grows, since that demand drives how many data centers get built and upgraded.

Source: The Verge AI