Qualcomm expects data center chips to reach 30% of its business as phone sales fall

Qualcomm's 30 percent target

Qualcomm is preparing for a future in which roughly 30 percent of its business comes from data center chips. The company confirmed that target during its Q4 2026 earnings call, as reported by The Verge, laying out a plan to become a serious supplier of AI infrastructure just as its traditional smartphone market shrinks.

The numbers behind the pivot

According to The Verge, smartphone sales have fallen by around 20 percent compared with 2025, pushing Qualcomm to look for new sources of growth. Its answer is the data center market, where it has been working with Amazon and Meta on partnerships announced earlier this year.

The revenue projections are steep. Qualcomm expects roughly $650 million in data center revenue in the first quarter of 2027, rising to $5 billion by the end of that year and $15 billion by 2029. Set against Qualcomm's total 2026 revenue of $10.4 billion, the 2029 data center projection alone would exceed the company's entire annual take today, which implies Qualcomm expects the overall business to grow substantially rather than simply shifting revenue between divisions.

A more modest target than AMD's

Qualcomm's 30 percent ambition is significant, but it is not the industry high-water mark. AMD has said it expects more than 80 percent of its revenue to eventually come from data centers, as The Verge notes. The spread between the two forecasts suggests the opportunity is large enough that a supplier does not need to dominate the market to build a major new business line, and that demand for AI compute remains well ahead of supply.

Why it matters

Qualcomm built its business on smartphone processors, so a 20 percent drop in phone sales strikes directly at the company's foundation. The data center forecast is effectively an acknowledgment that mobile alone can no longer carry Qualcomm's growth story, and it represents one of the most consequential strategic shifts the chipmaker has made in years.

For the broader industry, another serious entrant in the AI data center chip market matters for two reasons. First, it adds supply to a segment where demand for AI compute has consistently outrun availability, which could help big infrastructure operators like Amazon and Meta, both of which are already working with Qualcomm. Second, it intensifies competition with established players and challengers alike, AMD chief among them, at a moment when nearly every major chipmaker is chasing the same AI budgets.

The credibility of the plan will be tested quickly. The jump from $650 million in a single quarter to $5 billion within the same year is an unusually aggressive ramp, and reaching $15 billion in 2029 depends on the cloud partnerships converting into sustained order volume. If the forecast holds, Qualcomm will end the decade looking considerably less like a phone company and considerably more like an infrastructure supplier.