Qualcomm is betting big on data centers as smartphone sales sink

Qualcomm used its Q4 2026 earnings call to outline an expansion into the AI data center business, a push aimed at offsetting a sharp decline in smartphone sales. The company told investors it expects data center chips to eventually make up around 30 percent of its business. The call took place as part of the company's Fall 2026 earnings watch.

The smartphone market has weighed on Qualcomm, with sales sinking by around 20 percent compared to 2025. Against that backdrop, the company is leaning on data centers to lift its bottom line. Qualcomm laid out the plan through partnerships with Amazon and Meta that were announced earlier this year.

Qualcomm forecast roughly $650 million in data center revenue during the first quarter of 2027. It expects that figure to reach $5 billion by the end of 2027 and $15 billion by 2029. The company confirmed on the call that it anticipates data centers will eventually account for around 30 percent of its business.

Those targets would represent a substantial share of Qualcomm's earnings. The company's total revenue for 2026 was $10.4 billion. The data center projections come as demand for AI infrastructure continues to draw spending across the technology industry.

The ambition is smaller than that of AMD, which has said it expects over 80 percent of its revenue to eventually come from data centers. Qualcomm's forecast nonetheless points to demand that still needs to be filled, with AI spending spreading across multiple suppliers. For a US technology audience, the plan positions Qualcomm as a new entrant competing for data center AI business alongside established players.

Qualcomm's partners in the effort are Amazon and Meta, both named by the company as part of the earlier announcements. The earnings call served as the venue for the company to quantify, for the first time in the figures it presented, how large it expects that business to become. The smartphone decline and the data center targets were presented together as the company's current financial picture.

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