Qualcomm Targets Data Center Growth Amid Declining Smartphone Sales

Image: Qualcomm is betting big on data centers as smartphone sales sink · Source

Qualcomm plans to significantly grow its data center business, aiming for up to $15 billion in revenue by 2029 as smartphone sales decline. Partnerships with Amazon and Meta are key to this shift.

Qualcomm is strategically shifting focus toward data centers as global smartphone sales have dropped sharply by about 20 percent compared to 2025. This pivot was outlined during Qualcomm's Q4 2026 earnings call, where the company detailed ambitions to expand its presence in the AI data center market. Earlier in 2026, Qualcomm announced collaborations with major tech companies like Amazon and Meta, signaling its intent to capitalize on the AI-driven demand for data center technologies.

The company's forecast indicates rapid growth in the data center segment, expecting approximately $650 million in revenue by the first quarter of 2027. This figure is projected to increase substantially, reaching $5 billion by the end of 2027 and escalating to $15 billion by 2029. To put this into context, Qualcomm's total revenue for 2026 was $10.4 billion, meaning the predicted data center revenue could represent a major part of its future earnings.

Qualcomm confirmed that data centers are expected to form about 30 percent of its overall business moving forward. While this target is less aggressive than competitors like AMD, which anticipates over 80 percent of its revenue eventually coming from data centers, it underscores the robust demand and investment flowing into AI infrastructure.

This strategic emphasis reflects broader industry trends as semiconductor companies diversify beyond traditional smartphone markets to tap into the lucrative AI and data processing sectors. Qualcomm's partnerships with cloud giants and social media leaders position it well to supply critical components for AI-driven data centers.

Overall, Qualcomm's growth plan in data centers highlights the company's response to the challenges in the smartphone sector and its commitment to leveraging emerging opportunities in artificial intelligence and cloud computing.