Qualcomm targets $15B data center revenue by 2029

Qualcomm is making a decisive move into data center infrastructure, announcing ambitious revenue targets and a suite of products designed to challenge Nvidia's dominance in AI computing.

At its investor day Wednesday, the chip designer revealed it expects to generate $15 billion in data center revenue by fiscal 2029, part of a broader push to nearly double its non-handset revenue to $40 billion over the same period. The company also set a nearer-term target of $5 billion in data center revenue for fiscal 2027, which begins in three months.

From smartphones to servers

Qualcomm built its reputation designing chips for mobile devices, but smartphone market saturation and the loss of Apple as a major customer forced the company to diversify. Its initial pivot targeted edge computing—laptops, augmented reality glasses, and automotive systems. Now it's extending that strategy into the data center itself.

"We used to be a smartphone company, now we're an edge device company, and the next phase of Qualcomm is getting into rack scale infrastructure," CFO Akash Palkiwala told Yahoo Finance at the New York City event.

The company introduced a comprehensive portfolio including its own AI accelerator chips, memory products, a new CPU, networking components, and complete rack-scale servers. Qualcomm positions this as a turnkey alternative to Nvidia's platforms, offering companies more options as they build out AI infrastructure.

Why it matters

Qualcomm's infrastructure push represents a significant strategic shift for a company that generated the bulk of its revenue from smartphone modems and processors. Success would transform its business model and reduce dependence on the volatile handset market. For enterprise buyers, a credible alternative to Nvidia could provide pricing leverage and supply chain diversity as AI data center spending accelerates. The company's edge computing expertise—designing power-efficient chips for battery-powered devices—could translate into differentiated server products optimized for inference workloads.

Market response

Investors responded enthusiastically to the announcement. Qualcomm shares jumped 13% immediately following Palkiwala's presentation and maintained a 7% gain through midday Thursday trading.

The data center expansion builds on Qualcomm's existing transition away from smartphone dependence. By targeting both edge devices and centralized infrastructure, the company is positioning itself across the full spectrum of AI computing—from the devices in users' hands to the servers powering backend processing.

Whether Qualcomm can execute on these projections remains to be seen, but the company is backing its ambitions with concrete products and specific financial targets. The next three months will provide an early test as fiscal 2027 begins and the company pursues its initial $5 billion revenue milestone.

These details were first reported by Yahoo Finance.