Qualcomm targets AI data centers as phone sales fall

Qualcomm used its Q4 2026 earnings call to signal a sharper push into AI data centers, while smartphone sales are described in the source as down about 20 percent from 2025 levels. The company said it expects roughly $650 million in data center revenue in the first quarter of 2027, with a longer-term target of $5 billion by the end of 2027 and $15 billion by 2029.

Those figures matter because the source says Qualcomm’s total revenue for 2026 was $10.4 billion. If the company reaches even part of its stated data center goals, that business could become a much larger contributor than it is today, helping offset weaker demand in the smartphone market that has long been central to Qualcomm’s business.

What Qualcomm said about its AI infrastructure push

According to the source, Qualcomm tied its data center ambitions to partnerships announced earlier this year with Amazon and Meta. The company presented those relationships as part of a broader effort to establish itself in AI infrastructure, an area where demand has been driven by training and running large AI models.

What is confirmed here is Qualcomm’s own forecast and its emphasis on data centers during the earnings call. What remains unclear from the supplied information is how much of that projected revenue depends on specific customer deployments, how quickly those chips will move into production at scale, and how Qualcomm expects to compete against entrenched data center suppliers.

Why the shift matters

The strategic logic is straightforward: smartphone demand can be cyclical, while AI infrastructure spending has become one of the technology industry’s biggest investment areas. For Qualcomm, moving deeper into servers and data centers could diversify revenue beyond handsets and connected devices.

A hypothetical enterprise example helps illustrate the opportunity. If a cloud provider expands AI inference capacity for customer chatbots, coding assistants, or recommendation systems, it may need large volumes of accelerator and server silicon; that is the kind of spending pool Qualcomm appears to be targeting, though the source does not identify any specific deployment.

The scale of Qualcomm’s forecast also raises the stakes. A move from hundreds of millions in quarterly data center revenue to multibillion-dollar annual targets would imply unusually fast execution, so investors and enterprise buyers will likely watch for concrete product rollouts and customer uptake over the next several quarters.

Source: original reporting by The Verge. The claims above reflect the information supplied in that source.

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