Qualcomm stock jumped over 12% in premarket trading Thursday after the company said it raised its non-handset revenue target to $40 billion by fiscal 2029 - double its previous goal. The figure includes an anticipated $15 billion from data center revenue, marking the chipmaker's most aggressive move yet into the AI infrastructure market dominated by Nvidia.
The announcement came during Qualcomm's investor day event in New York on Wednesday. The company outlined plans for a range of data center products, including chips, servers, software, and custom processors. Qualcomm is entering a space where Nvidia holds a commanding lead, AMD is expanding with its own server rack, and a wave of upstart chip designers are competing for a share of the global AI build-out.
CEO Cristiano Amon told reporters that cloud and AI companies are hungry for alternatives. "I have not met a single one of those cloud and AI companies that have not said to me how excited they are," he said, adding that business leaders exclaim, "Hey, Qualcomm is going to bring competition to data centers!"
The China question
Amon also signaled that China will be part of the data center strategy. "Everything that we're building for the data center, you should assume that China is going to be a target market," he said. The U.S. government has moved back and forth on AI chip exports to China over security concerns. The Trump administration recently said it would permit sales of certain Nvidia AI processors, though Chinese regulators have not approved them for import.
Beyond the handset
The data center push is the sharpest edge of Qualcomm's broader transformation away from smartphone dependence. The company expects its automotive segment to bring in $10 billion by fiscal 2029. It is also competing with Intel and AMD in the PC chip market. For executives tracking the strategic repositioning of semiconductor firms, AI for Executives & Strategy courses cover how leadership teams are navigating this kind of pivot.
Qualcomm recently announced it is acquiring AI software company Modular. The deal gives Qualcomm a software platform that rivals Nvidia's CUDA, allowing developers to build AI programs that take full advantage of GPUs. The acquisition fills a critical gap in Qualcomm's software stack as it prepares to sell into data centers where CUDA has been the default for years.
Market reaction and broader context
AI stocks had pulled back earlier in the week on growth concerns, but the sector surged after Qualcomm's announcement and Micron's stronger-than-expected quarterly earnings released Wednesday afternoon. The twin catalysts reinforced investor conviction that AI infrastructure spending is accelerating rather than slowing. For finance professionals evaluating semiconductor exposure, understanding how AI revenue shifts are reshaping valuations has become essential - a focus of many AI for Finance Courses that examine real-world market impacts.
Why this matters for finance professionals
Qualcomm's $40 billion non-handset revenue target for 2029 rewrites expectations for a company long defined by smartphone cycles. If the data center segment delivers $15 billion - roughly what Qualcomm's entire automotive and IoT businesses generated combined last year - the stock's risk profile changes materially. The key metrics to watch are data center design wins over the next 12 to 18 months and whether the Modular acquisition accelerates software ecosystem adoption. A credible second source for AI data center silicon would shift pricing power dynamics in a market where Nvidia currently captures margins above 70%.
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