Qualcomm is betting big on data centers as smartphone sales sink

Qualcomm’s phone business is shrinking hard — smartphone sales are down around 20% versus 2025 — and management is openly betting the company’s next act on AI data-center silicon. That is a structural pivot, not a side project.

On the Q4 2026 call the company forecast about $650 million in data-center revenue in the first quarter of 2027, then $5 billion by year-end 2027 and $15 billion by 2029. Against $10.4 billion in total 2026 revenue, those targets would remake the mix.

Partnerships with Amazon and Meta, announced earlier this year, are the go-to-market proof points. The question is whether Qualcomm can actually capture that share against Nvidia, AMD, and the hyperscalers’ own silicon.

We’re watching Qualcomm try to do what every mature chip vendor eventually has to do when its core end market stalls: find a second engine before the first one dies of gravity. Management says data centers should eventually be about 30% of the business. That is ambitious for Qualcomm and still modest next to AMD’s claim that data centers will eventually be over 80% of its revenue — which tells you how crowded and how large the opportunity looks from inside the industry.

The near-term numbers are the part that matters. Six hundred fifty million in a single quarter next year is a real business if they hit it; $15 billion by 2029 is a company-defining bet. Those targets only work if the Amazon and Meta relationships turn into volume, yields stay competitive, and software stacks that already prefer Nvidia do not lock Qualcomm out of the training and inference workloads that pay.

Useful AI needs more than one supplier of accelerators. Diversifying the silicon base is good for buyers and for the resilience of the buildout. The downside is familiar: CapEx cycles can reverse, hyperscalers can favor in-house chips, and a phone company that underdelivers on its new story gets punished twice — once for the phones, once for the miss.

Our read is that Qualcomm is reading the room correctly. Smartphones are no longer the growth story, and the AI infra wave is. Hitting the 2027 checkpoints is the only evidence that will matter.

The Verge’s Terrence O’Brien covers Qualcomm’s Q4 2026 earnings framing: phone weakness, data-center forecasts through 2029, and the Amazon/Meta partnership backdrop. AMD’s higher long-term data-center mix is the competitive yardstick cited on the same call narrative.