Qualcomm Eyes Data Centers for AI Growth Amidst Smartphone Slump

With smartphone sales reportedly experiencing a significant downturn, around 20 percent lower than in 2025, Qualcomm is strategically shifting its focus to the data center business to bolster its financial performance. During its fourth-quarter 2026 earnings call, the chip giant unveiled ambitious plans to make a substantial impact in the AI data center arena. This strategic move involves forging partnerships with major players like Amazon and Meta, collaborations that were announced earlier this year.

Qualcomm anticipates rapid growth in this segment, projecting approximately $650 million in data center revenue for the first quarter of 2027. Looking further ahead, the company has set even more aggressive targets, expecting this figure to climb to $5 billion by the end of 2027 and reach an impressive $15 billion by 2029. This aggressive expansion into data centers underscores Qualcomm's commitment to diversifying its revenue streams and capitalizing on the burgeoning demand for AI-powered infrastructure.

Considering that Qualcomm's total revenue for 2026 stood at $10.4 billion, the projected growth in the data center sector represents a significant portion of its future business. This strategic pivot highlights a broader trend within the tech industry, where companies are adapting to market shifts and seeking new avenues for growth, especially with the rapid advancements and increasing adoption of artificial intelligence.