Qualcomm raised its non-handset revenue target for fiscal 2029 to $40 billion, nearly double the $22 billion goal set in 2024, and for the first time put a hard number on data center sales - more than $15 billion. The stock jumped as much as 15% on the news, a sharp reaction for a company whose chips still sit mostly inside smartphones.
A bigger bet beyond the smartphone
The new targets are the boldest articulation yet of Qualcomm's diversification push. The company detailed a server processor called the Dragonfly C1000, built around more than 250 of its custom cores, and a line of AI accelerators designed for inference workloads rather than training. Management is targeting more than $15 billion in data center revenue by fiscal 2029, up from almost nothing today.
The non-handset goal also includes a $10 billion annual target for automotive revenue by fiscal 2029. That business is already moving: automotive revenue hit a record $1.3 billion in Qualcomm's fiscal second quarter of 2026, up 38% year over year, backed by a design-win pipeline the company pegs at about $65 billion.
The new figures replace a prior $22 billion non-handset target that was itself meant to reduce dependence on a maturing smartphone market - and the gradual loss of Apple as a modem customer as the iPhone maker shifts to its own in-house chips. Handset revenue still accounted for roughly $6 billion of the $10.6 billion in total fiscal Q2 sales.
Validation from a major customer
The most concrete support for the data center ambition came from Meta Platforms, which agreed to a multi-year, multi-generation deal to use Qualcomm's new processor in its data centers. Production is scheduled to start in the second half of 2028. Landing one of the world's largest infrastructure spenders is a meaningful endorsement for a company that has yet to ship a single data center chip at scale.
A late start in a crowded market
Qualcomm is entering a market where Nvidia controls the vast majority of AI chip sales and a deep software ecosystem keeps customers from switching easily. The Dragonfly C1000 and the HBC-based AI250 accelerator won't begin commercial sampling until mid-2027, and the Meta CPU production timeline means revenue won't materialize until fiscal 2029 at the earliest. A lot can change in that window.
Why this matters for finance professionals
The market is still pricing Qualcomm as a mature smartphone-chip supplier. On a non-GAAP basis, the stock trades at about 17 times earnings, well below the broader market and a fraction of what pricier AI chip names command. The Meta agreement suggests the diversification story is more than a slide deck, but the $40 billion non-handset revenue target hinges on years of execution in markets where Qualcomm hasn't proven it can win at scale. That combination of a low valuation, a credible growth path, and real competitive risk creates an asymmetric setup - one that requires weighing the long timeline against the price being asked today.
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