Key Takeaways
- Qualcomm increased its fiscal 2029 non-mobile revenue projection to approximately $40 billion from a previous $22 billion forecast
- The semiconductor company established a data center revenue objective exceeding $15 billion by fiscal year 2029
- Meta Platforms committed to a multi-year agreement utilizing Qualcomm’s Dragonfly C1000 server chip
- Automotive segment revenue reached an all-time high of $1.3 billion in fiscal Q2 2026, representing 38% annual growth
- QCOM shares surged as much as 15% following the announcement before experiencing a modest retreat
During its investor day presentation on Wednesday, Qualcomm delivered a series of bold announcements that captured Wall Street’s attention. The semiconductor giant effectively doubled its fiscal 2029 revenue outlook for non-handset divisions, elevating the target to approximately $40 billion from the $22 billion projection established in 2024. Market reaction was immediate, with shares climbing as high as 15% during trading.
The previous $22 billion forecast already represented an ambitious expansion plan for a corporation historically synonymous with mobile phone semiconductors. This updated projection signals Qualcomm’s determination to transform itself beyond its smartphone-centric foundation.
At the heart of this transformation strategy lies the data center market. The company introduced its Dragonfly C1000, a server-grade processor featuring over 250 custom-designed cores. Alongside this, Qualcomm revealed a series of AI accelerators specifically engineered for inference workloads rather than model training. Company leadership has established a data center revenue target surpassing $15 billion by the end of fiscal 2029, representing a dramatic leap from current negligible levels.
To put this in perspective, Qualcomm reported total quarterly revenue of $10.6 billion in fiscal Q2 2026. Mobile handset chips continue to account for approximately $6 billion of that figure. Data center contributions remain virtually non-existent at present.
Perhaps more significant than any technical specification was the customer announcement. Meta Platforms has entered into a multi-year, multi-generation commitment to deploy Qualcomm’s new processor architecture across its data center infrastructure, with manufacturing scheduled to commence during the latter half of 2028. Securing Meta as an anchor customer lends substantial legitimacy to Qualcomm’s data center ambitions.
Meta Partnership Validates Data Center Strategy
Qualcomm’s newly developed High Bandwidth Compute (HBC) architecture employs vertical chip stacking rather than traditional horizontal arrangements, positioning memory and processing units in closer proximity. According to the company, this configuration enhances data transfer rates and overall system efficiency.
The inaugural generation utilizing this architecture is slated for data center deployment next year, with broader commercial distribution anticipated in 2028. Qualcomm has initiated discussions with manufacturers across smartphones, personal computers, and automotive sectors regarding potential integration of this technology into their respective products.
Executive Vice President Durga Malladi articulated the vision clearly: “What starts in data centers is not going to end there.”
The AI250 accelerator, constructed on the HBC platform, won’t enter commercial sampling phase until mid-2027. Meta’s processor manufacturing timeline doesn’t begin until late 2028. These remain prospective milestones rather than current revenue streams.
Automotive Division Shows Immediate Results
While the data center narrative focuses on 2028 and beyond, the automotive segment is generating results today. Qualcomm reported record-breaking automotive revenue of $1.3 billion during fiscal Q2 2026, marking a 38% increase from the prior year period. The company has established an annual automotive revenue goal of $10 billion by fiscal 2029, supported by a design-win pipeline the company estimates at approximately $65 billion in value.
This tangible progress reinforces the credibility of Qualcomm’s broader diversification initiative. The automotive division demonstrates that the expansion strategy can succeed in markets beyond smartphones.
From a valuation perspective, the stock currently trades at roughly 17 times non-GAAP earnings. This multiple sits well below broader market averages and represents a significant discount compared to leading AI semiconductor competitors — indicating investors continue to view Qualcomm primarily through the lens of its mobile chip heritage.
QCOM finished Thursday’s session at $189.39, declining 7.57% as investors took profits following Wednesday’s investor day-fueled rally.
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