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Qualcomm is betting big on data centers as smartphone sales sink

ChipsNovember 5, 20261 min read

Qualcomm, a maker of phone chips, says smartphone sales are falling fast. So it is betting on AI data centers to grow its business. The company made this plan clear on its latest earnings call.

What happened

Smartphone sales dropped by about 20 percent compared to 2025. During its Q4 2026 earnings call, Qualcomm explained how it plans to grow in AI data centers. It has partnerships with companies like Amazon and Meta, which were announced earlier this year. The company expects its data center business to grow quickly.

Key numbers

Qualcomm's total revenue for 2026 was $10.4 billion.
Data center revenue is expected to be about $650 million in the first quarter of 2027.
The company expects data center revenue to reach $5 billion by the end of 2027.
By 2029, data center revenue is expected to reach $15 billion.
Qualcomm expects data centers to eventually make up around 30 percent of its business.

Why the switch

Data centers are large buildings full of computers that run websites, apps, and AI tools. Companies that make chips for these buildings can earn a lot of money as AI use grows. AMD, another chip company, expects over 80 percent of its revenue to come from data centers in the future. That shows how big this market is for chip makers.

Why it matters

Phone sales are falling, so Qualcomm needs new ways to earn money. If its data center plan works, it could change the company a lot. The plan also shows that many companies want to buy AI chips. There seems to be enough demand for many chip makers.

What to watch

Whether Qualcomm reaches its goal of $5 billion in data center revenue by the end of 2027.
How its partnerships with Amazon and Meta grow over time.
Whether smartphone sales keep falling in the coming months.

Glossary

Qualcomm: A company that makes chips used in phones and other devices, and now also wants to sell chips for data centers.
data center: A large building full of computers that store data and run websites, apps, and AI tools.
AI: Artificial intelligence, which is computer software that can learn patterns and do tasks like answer questions or create text.
earnings call: A online meeting where a company shares its money results and plans with investors.
AMD: A chip company that makes processors and AI chips, especially for data centers.
revenue: The total money a company brings in from selling its products or services, before costs are taken out.

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