Qualcomm is betting big on data centers as smartphone sales sink

Qualcomm is shifting its focus to AI data centers as its smartphone business weakens.

Smartphone sales have fallen by around 20 percent compared with 2025. On its Q4 2026 earnings call, Qualcomm laid out plans to expand into the AI data center market through partnerships with Amazon and Meta, announced earlier this year.

The company expects this business to grow quickly, forecasting about $650 million in data center revenue in the first quarter of 2027. It anticipates reaching $5 billion by the end of 2027 and $15 billion by 2029. Against total 2026 revenue of $10.4 billion, that would be a significant share of earnings.

Key points

• Smartphone sales are down around 20 percent compared with 2025.
• Qualcomm forecasts about $650 million in data center revenue for Q1 2027.
• The company targets $5 billion in data center revenue by the end of 2027.
• Qualcomm expects data centers to reach around 30 percent of its business eventually.
• Total 2026 revenue was $10.4 billion.

Why it matters

Qualcomm's move shows how chipmakers are seeking growth in AI infrastructure as consumer device demand falls. Its target of 30 percent is less ambitious than AMD's stated goal of over 80 percent, but it points to strong expected demand for AI computing.