Qualcomm targets $15B data center revenue by 2029 via Meta deal

Qualcomm Targets $15B in Data Center Revenue by 2029 via Meta Deal

Qualcomm Inc. is aggressively expanding its footprint beyond mobile devices, announcing a strategic pivot toward the data center market with a revenue target of $15 billion by fiscal 2029. As part of this push, the company revealed a new central processing unit (CPU) for data centers, the Dragonfly C1000, and confirmed that Meta will utilize the technology when production begins in 2028.

Strategic Pivot to Data Center Infrastructure

The announcement, made during a presentation to investors, signals a major shift for a company historically defined by smartphone processors and modems. Qualcomm’s leadership characterized the move as a natural evolution of its existing business. CEO Cristiano Amon stated that the company has spent years executing and collecting assets to build a comprehensive portfolio capable of entering the next phase of the data center market.

Qualcomm’s CFO, Akash Palkhiwala, noted that the company’s existing relationships with hyperscalers—built through its smartphone and edge-computing components—facilitated these new data center engagements.

Focus on Power Efficiency and “Agentic” AI

Qualcomm is positioning its entry into the data center space as a solution to the industry’s growing energy constraints. As AI workloads shift from training to inference—the process of running models in real-world applications—power efficiency is becoming a critical priority.

The Dragonfly C1000 CPU is specifically engineered for “agentic” AI, which involves autonomous systems capable of performing tasks and making independent decisions. Qualcomm argues that its decades of experience designing chips for smartphones, where minimizing milliwatts of power consumption is essential, gives it a competitive advantage in designing hardware that reduces the energy costs of operating AI at scale.

Supply Chain Advantages and Market Diversification

Qualcomm’s data center strategy also includes a plan to bypass current industry bottlenecks. Many AI accelerators from competitors currently rely on CoWoS (Chip-on-Wafer-on-Substrate) packaging, a technology facing significant supply shortages. Qualcomm’s AI200 chip utilizes LPDDR5X memory instead of the high-bandwidth memory (HBM) that requires CoWoS, allowing Qualcomm to operate on a different supply chain and avoid manufacturing constraints.

This diversification is part of a broader effort to reduce reliance on the smartphone market, which saw shipments peak in 2017. Qualcomm’s updated financial forecasts reflect this, with the company raising its non-handset revenue target for fiscal 2029 to $40 billion, up from a previous forecast of $22 billion. Additionally, the company has expanded its automotive “design-win pipeline” to $65 billion, with a revenue target of $10 billion for that segment by fiscal 2029.

Financial Outlook and Industry Context

Following the announcement, Qualcomm shares rose 15% in extended trading. The company is targeting total adjusted earnings of over $18 per share by fiscal 2029, surpassing the $15.26 target currently held by analysts polled by LSEG. While Qualcomm remains a significant player in mobile, the company is increasingly integrating AI directly into devices through its Snapdragon Reality Elite platform, which features 48 TOPS of processing power for on-device generative AI.

Despite these targets, Qualcomm continues to operate in a competitive landscape. While the company has seen its stock price increase by approximately 50% since mid-April, analysts remain divided on the long-term potential of various AI-focused stocks, with some noting that other firms may offer different risk-reward profiles in the current market environment.