AINov 5, 2026, 3:08 AM UTC·1 min read

Qualcomm Bets on AI Data Centers as Smartphone Sales Fall 20%

Qualcomm is turning to AI data centers as smartphone sales drop about 20 percent, forecasting $15 billion in data center revenue by 2029.

A Qualcomm Snapdragon chip beside server racks in an AI data center, illustrating the company's shift beyond smartphones. — Image: The Verge

Qualcomm is pushing hard into AI data centers to offset a smartphone market that has shrunk by around 20 percent compared with 2025. During its fiscal Q4 2026 earnings call, the chipmaker laid out how it intends to build a sizeable business in the segment.

The forecast

The company expects roughly $650 million in data center revenue in the first quarter of 2027. It anticipates that figure will climb to $5 billion by the end of 2027 and reach $15 billion by 2029. The push builds on partnerships with companies such as Amazon and Meta, which Qualcomm announced earlier this year.

To put those numbers in perspective, Qualcomm's total revenue for 2026 was $10.4 billion. A $15 billion data center line would therefore be a major contributor on its own. Qualcomm confirmed on the call that it expects data centers to eventually represent about 30 percent of its business.

How it compares

That target is less aggressive than AMD's, which says it expects more than 80 percent of its revenue to come from data centers eventually. Still, Qualcomm's plan suggests there is plenty of unmet demand in AI infrastructure and enough spending to support several chip suppliers at once.

For Qualcomm, long known for mobile processors, the shift is a notable change in emphasis. With handset demand weakening, diversification into servers and AI hardware has become a central part of its growth story.

The next test will be the first-quarter 2027 results, which will show whether the company can reach the roughly $650 million data center figure it has projected and stay on course for its longer-term targets.

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Tags:qualcommdata centersai chipsearningssmartphonesamd