When your core market shrinks by a fifth in a single year, you need a new story to tell Wall Street. With smartphone sales down around 20 percent compared to 2025, Qualcomm used its Q4 2026 earnings call to lay out a fast expansion into the AI data center business, predicting that server chips will eventually account for roughly 30 percent of its entire business.
Trading Pockets for Server Racks
Qualcomm brought in $10.4 billion in total revenue for 2026. That baseline makes its new AI forecasts look remarkably aggressive. Building on partnerships with Amazon and Meta that were announced earlier in 2026, the company expects its data center division alone to outgrow its current total revenue within three years.
The company laid out a steep growth curve for the division during the call:
- $650 million in Q1 2027: The initial quarterly data center revenue forecast as those early commercial deals start generating cash.
- $5 billion by late 2027: The figure Qualcomm anticipates data center revenue will reach by the end of 2027.
- $15 billion by 2029: The projected revenue mark two years later, which sits well above the $10.4 billion the entire company generated across 2026.
- 30 percent of the business: The share of overall revenue that Qualcomm expects data centers to eventually represent.
Room at the AI Trough
Promising to turn a $650 million quarterly line item into a $15 billion pillar is bold. Compared to the rest of the chip industry, it is practically modest.
AMD expects data centers to eventually generate over 80 percent of its total revenue. Qualcomm does not need to go quite that far to fix its balance sheet. As long as buyers like Amazon and Meta have more AI demand than current suppliers can fill, there is plenty of data center money to go around, and selling server silicon beats waiting for people to upgrade their phones.