Qualcomm unveiled its Dragonfly data center CPU portfolio with Meta as the first major customer, nearly doubling its 2029 non-handset revenue projection to $15 billion.
Qualcomm shares jumped 15% in extended trading on Wednesday after the chipmaker said non-handset revenue in fiscal 2029 will be $40 billion, up from a prior forecast of $22 billion. The company also announced it is targeting $15 billion in data center sales for that year and seeking total adjusted earnings of over $18 per share, compared with an LSEG analyst EPS target of $15.26 for fiscal 2029.
Earlier that day, Qualcomm revealed a central processing unit for data centers called Dragonfly C1000 and said Meta will use it when production begins in 2028. The chipmaker noted that the new CPU was built for agentic AI and focuses on delivering computing performance while minimizing power consumption.
The announcement at a Qualcomm investor presentation underscores the company's aggressive pivot beyond its core smartphone business. Qualcomm said it has developed a roadmap to target the rapidly growing data center market with multiple products, including an AI chip and a product designed to connect multiple chips together. CEO Cristiano Amon said the company has "just been executing, collecting assets, and when we got to this point, we feel that we have a comprehensive portfolio to enter the next phase of the data center."
Akash Palkhiwala, Qualcomm's CFO, noted that the company already has business with nearly every hyperscaler through its smartphone chips and existing products. "This is not a new relationship. It's the benefit of what we've delivered to them already on the edge, combined with the scale and the expertise and the confidence in Qualcomm, is what makes them engage with us on data center," he said.
The push comes as investor interest in CPUs is rising, driven by expectations that central processors will absorb increasing workload from graphics processing units and AI chips due to the rise of AI agents that operate autonomously. "There really isn't enough supply, and multiple players are needed," in the CPU market, Palkhiwala said.
Qualcomm's primary business has centered on smartphones, which accounted for two-thirds of the company's product revenues in the quarter ended in March. The company is now diversifying into cars, robots, and data centers—all faster-growing chip markets than smartphones, which peaked in shipments in 2017.
As part of its updated forecasts, Qualcomm expanded its automotive design-win pipeline to $65 billion and increased its revenue target to $10 billion by fiscal 2029. The company emphasized that its expertise in making smartphone and PC chips that conserve battery life will serve hyperscalers increasingly focused on building data centers where electrical power is the limiting factor. Qualcomm said it has secured two deals to produce custom silicon chips for hyperscalers.
Separately, Qualcomm announced it had acquired Modular for an undisclosed price. The startup developed software that enables AI applications to run across a broad range of chip architectures—functionality equivalent to Nvidia's CUDA, which is used in many AI applications.
Addressing concerns about timing, Amon told investors the company was not entering the data center market too late. "When people ask about if it's late to enter the data center, you should think about scale and execution, or engineering capabilities, or operations and supply chain," he said.