Qualcomm is turning to data centers for growth as smartphone sales decline. The company laid out plans to expand its AI data center business during its Q4 2026 earnings call, pointing to partnerships with Amazon and Meta and ambitious revenue forecasts.
A new growth engine
The company expects data center chips to become a meaningful source of revenue. It forecasts around $650 million in data center revenue during the first quarter of 2027, followed by $5 billion by the end of 2027 and $15 billion by 2029.
Those projections would make the business a substantial part of Qualcomm’s operations. The company said it expects data centers to eventually account for around 30 percent of its business.
The figures show how quickly Qualcomm hopes this market can grow. Its 2026 total revenue was $10.4 billion, giving context to the scale of the data center targets, though the company’s projected future revenue is not guaranteed.
Why Qualcomm is shifting focus
The strategy comes as smartphone sales are tanking by around 20 percent compared to 2025. With that part of the market under pressure, data centers offer Qualcomm another path to support its bottom line.
The company’s plans center on AI data center chips and partnerships with Amazon and Meta that were announced earlier this year. The earnings call put those efforts alongside specific revenue expectations, signaling that Qualcomm sees data centers as more than a side business.
For the company, the opportunity is not only about replacing weaker smartphone sales. Reaching the stated targets would reshape the mix of its business, making data center revenue a central contributor over time.
Qualcomm’s target in the wider chip race
Qualcomm’s expectation that data centers will eventually make up around 30 percent of its business is notable, though it is less ambitious than AMD’s outlook. AMD says it expects over 80 percent of its revenue will eventually come from data centers.
The comparison points to the scale of the opportunity chipmakers see in AI infrastructure. Qualcomm’s forecast suggests it believes demand is large enough to support a substantial new business, even as other companies pursue the same customers and markets.
That does not mean Qualcomm’s projections are assured. They are targets laid out by the company, and the article provides no guarantee that the revenue milestones or the eventual business mix will be reached.
What the forecast would mean
If Qualcomm meets its estimates, the data center business would grow from an expected $650 million in the first quarter of 2027 to $5 billion by the year’s end, then to $15 billion by 2029. The company’s stated longer-term goal of around 30 percent would make data centers an important pillar alongside its existing business.
The move reflects a response to two pressures described in the earnings call: falling smartphone sales and a growing opportunity in AI data centers. Qualcomm is betting that partnerships and chip demand can turn that opportunity into a durable revenue stream.
For now, the important distinction is between expectation and result. Qualcomm has shared its targets, but its future depends on whether the data center business grows as quickly as the company anticipates.