Qualcomm Shifts Gears: Data‑Center Chips to Power 30% of Revenue as Smartphone Sales Slump

Qualcomm (QCOM) announced during its Q4 2026 earnings call that the chipmaker will lean heavily on data‑center silicon to offset a roughly 20 percent decline in smartphone sales versus 2025. The company projects that chips for artificial‑intelligence (AI) workloads in data centers will eventually represent about 30 percent of its total revenue, a shift that could reshape its product roadmap. The guidance includes a $650 million data‑center revenue target for the first quarter of 2027, climbing to $5 billion by the end of that year and $15 billion by 2029. Qualcomm cited recent collaborations with Amazon Web Services and Meta Platforms, which will integrate its Snapdragon‑AI accelerators into next‑generation server racks. "Our data‑center portfolio is moving from a niche offering to a core growth engine," said CFO Mark McLaughlin during the call. Industry analysts note that the move mirrors a broader trend: as AI models balloon in size, demand for high‑throughput, low‑latency processors is outpacing traditional CPU and GPU supply. While AMD has pledged that over 80 percent of its future revenue will stem from data‑center products, Qualcomm’s 30‑percent ambition still signals a substantial market opportunity, especially given its $10.4 billion total revenue in 2026. Diversifying into data‑center chips could bolster Qualcomm’s earnings stability, but challenges remain. The company must scale its fab capacity, navigate intense competition from Nvidia, Intel and emerging Chinese players, and ensure its silicon meets the power‑efficiency thresholds demanded by hyperscale operators. If the $15 billion milestone is achieved, Qualcomm would not only recoup the shortfall from the smartphone slump but also position itself as a pivotal supplier in the AI‑driven cloud era. Observers will watch closely how the firm balances its legacy mobile business with the fast‑growing data‑center segment over the next three years.