Qualcomm expects data center chips to reach 30% of business as smartphone sales sink

Qualcomm is turning to data centers as smartphone sales fall by around 20 percent compared with 2025. During its Q4 2026 earnings call, the company said it expects data center chips to eventually account for around 30 percent of its business, supported by partnerships with companies such as Amazon and Meta announced earlier this year.

Data center revenue targets

Qualcomm forecast around $650 million in data center revenue during the first quarter of 2027. It anticipates that figure will reach $5 billion by the end of 2027 and $15 billion by 2029. The company's revenue for the fourth quarter of 2026 was $10.4 billion, so those targets would represent a significant share of its earnings.

Smartphone sales pressure

Smartphone sales are tanking by around 20 percent compared with 2025, pushing Qualcomm to look to data centers to help boost its bottom line. The company said it plans to make a splash in the AI data center business.

Industry context

AMD says it expects over 80 percent of its revenue will eventually come from data centers. Qualcomm's 30 percent target is less ambitious, but it suggests there is plenty of demand that needs to be filled and enough AI money to go around.

Sources: The Verge