Key Takeaways
- The chipmaker increased its fiscal 2029 non-handset revenue projection to approximately $40 billion from $22 billion
- A new data center revenue goal of over $15 billion was established for fiscal 2029
- Meta Platforms committed to a multi-year agreement for Qualcomm’s Dragonfly C1000 server chips
- Automotive segment revenue reached an all-time high of $1.3 billion in fiscal Q2 2026, climbing 38% annually
- QCOM shares surged up to 15% following the announcements before experiencing a pullback
During its investor day presentation on Wednesday, Qualcomm delivered significant news that sent shockwaves through the market. The semiconductor giant essentially doubled its fiscal 2029 revenue projection for non-smartphone businesses, elevating the target to approximately $40 billion from the previously announced $22 billion goal established in 2024. Shares climbed as much as 15% during the session.
The previous $22 billion projection was already considered ambitious for a corporation predominantly recognized for mobile phone semiconductors. This revised figure signals that Qualcomm is placing substantial resources into markets outside the smartphone sector.
The cornerstone of this strategic shift focuses on data center operations. Qualcomm introduced the Dragonfly C1000, a server chip featuring over 250 custom-designed cores. The company also presented a series of AI accelerators specifically engineered for inference workloads rather than model training. Leadership projects data center revenue exceeding $15 billion by fiscal 2029, representing a dramatic increase from current minimal levels.
To put this in perspective, Qualcomm generated $10.6 billion in total revenue during fiscal Q2 2026. Mobile phone chips accounted for approximately $6 billion of that figure. Data center revenue remains virtually nonexistent at present.
The most significant announcement wasn’t technical specifications—it was securing a marquee client. Meta Platforms entered into a multi-year, multi-generation agreement to deploy Qualcomm’s new processor across its data center infrastructure, with manufacturing scheduled to commence during the latter half of 2028. Securing Meta as an initial customer provides substantial validation for the data center initiative.
Meta Partnership Validates Data Center Strategy
Qualcomm’s newly developed High Bandwidth Compute (HBC) architecture employs vertical chip stacking instead of horizontal arrangements, positioning memory and processing units in closer proximity. According to the company, this configuration enhances data transfer rates and power efficiency.
The initial generation utilizing this architecture is scheduled for data center deployment next year, with widespread commercial rollout anticipated in 2028. Qualcomm is currently engaged in discussions with manufacturers across smartphones, personal computers, and automotive sectors regarding future implementation of this technology in their products.
Durga Malladi, Executive Vice President, stated clearly: “What starts in data centers is not going to end there.”
The AI250 accelerator, which leverages the HBC architecture, won’t enter commercial sampling until the middle of 2027. Meta’s CPU manufacturing timeline doesn’t begin until late 2028. These milestones remain prospective rather than current revenue generators.
Automotive Segment Shows Current Growth
While data center ambitions represent a 2028-and-beyond opportunity, the automotive division is already producing tangible results. Qualcomm reported record automotive revenue of $1.3 billion during fiscal Q2 2026, representing a 38% year-over-year increase. The company aims for $10 billion in annual automotive revenue by fiscal 2029, supported by a design-win pipeline valued at approximately $65 billion.
This performance provides concrete evidence supporting the broader diversification narrative. The automotive success demonstrates the viability of the strategy in at least one significant market segment.
From a valuation perspective, shares trade at approximately 17 times non-GAAP earnings. This represents a significant discount compared to the broader market and a fraction of valuations assigned to leading AI semiconductor companies—indicating investors still view Qualcomm primarily as a mobile chip manufacturer.
QCOM concluded Thursday’s trading at $189.39, declining 7.57% for the session, retreating from Wednesday’s investor day rally.
