Qualcomm eyes $15B data-center revenue by 2029

Qualcomm told investors it expects $15 billion in data-center revenue by 2029 and $5 billion in fiscal 2027, as the chipmaker expands beyond its smartphone business. At an investor presentation, the company raised its forecast for revenue from chips outside smartphones to $40 billion by 2029, up from a prior estimate of $22 billion. The announcement pushed Qualcomm shares up about 12% in premarket trading and lifted Arm Holdings shares by roughly 5%.

The company said Microsoft and Meta Platforms will use its new AI chips, and Qualcomm will build custom silicon for two unnamed hyperscalers. Executives framed the targets around growing demand for AI inference and the need for better performance-per-watt in large-scale computing systems. Qualcomm pointed to pressure on the handset market from a memory chip shortage linked to rising AI infrastructure demand and from major customers, including Apple and Samsung, developing more chips in-house.

Analysts had projected a slower ramp for Qualcomm’s data-center business. Bank of America analysts had estimated the effort could generate about $2 billion to $5 billion in annual revenue by fiscal 2027–28. Qualcomm’s new targets outline a faster expansion into servers and AI compute.

Qualcomm also reached an agreement to buy Modular Inc., saying the acquisition will strengthen Qualcomm Technologies’ software capabilities for generative and agentic AI across cloud and edge environments. Modular offers an open, AI-native software stack that aims to let models run efficiently across CPUs, GPUs, NPUs and custom ASICs without requiring developers to rewrite code for each accelerator. Qualcomm described the deal as intended to improve inference, orchestration and deployment in distributed AI systems and to connect system-level optimization with more heterogeneous and disaggregated hardware.

The transaction is expected to close in the second half of 2026, subject to customary closing conditions and regulatory approvals. Qualcomm said combining its chip portfolio with Modular’s software should allow customers to run AI workloads more efficiently across devices, edge systems and cloud infrastructure, with a focus on lowering inference costs and improving power efficiency as deployments grow.

At the investor event, CFO Akash Palkhiwala told attendees, “We will be truly diversified.” Cristiano Amon, Qualcomm’s president and CEO, described an industry shift to “disaggregated, multi-vendor architectures” and said those setups require “a more open and modern software foundation.” Modular co-founder and CEO Chris Lattner said joining Qualcomm would give his company “the scale and platform reach to accelerate that mission.”