Qualcomm bets on data centers as smartphone sales slump
US chipmaker Qualcomm plans to sharply grow its data center chip revenue as smartphone sales have fallen by around 20 percent. In the long run, the segment is expected to make up about 30 percent of its business.
Chipmaker Qualcomm said during its fiscal fourth-quarter 2026 earnings call that it is putting heavy emphasis on the AI data center market. The reason is a downturn in smartphones: sales are down roughly 20 percent compared with 2025. Data centers could become an important support for the company's bottom line.
Forecasts
Qualcomm is working with major tech firms such as Amazon and Meta, with partnerships announced earlier this year. It expects data center revenue to climb quickly: around $650 million in the first quarter of 2027, about $5 billion by the end of 2027 and $15 billion by 2029.
The company's total revenue for 2026 was $10.4 billion, so those figures would represent a substantial share of its earnings. During the call, Qualcomm confirmed that it expects data centers to eventually account for roughly 30 percent of its business.
Comparison with rivals
That is less ambitious than rival chipmaker AMD, which says it expects more than 80 percent of its revenue to eventually come from data centers. According to The Verge, this suggests there is plenty of demand to be filled and enough AI money to go around for several players.
