Qualcomm (QCOM) Stock Rockets 15% After Meta Partnership and Aggressive Data Center Goals

Key Takeaways

• Qualcomm increased its fiscal 2029 non-smartphone revenue forecast to approximately $40 billion from $22 billion
• The chip manufacturer established a data center revenue objective exceeding $15 billion by fiscal 2029
• Meta Platforms committed to a multi-year partnership utilizing Qualcomm’s Dragonfly C1000 server chip
• Automotive segment generated record $1.3 billion in Q2 FY2026, representing 38% growth year-over-year
• QCOM shares surged up to 15% following the announcement before moderating

During Wednesday’s investor presentation, Qualcomm unveiled an aggressive expansion strategy that sent Wall Street into a frenzy. The semiconductor company nearly doubled its fiscal 2029 revenue projection for non-smartphone segments, elevating the target to approximately $40 billion from the previous $22 billion goal announced in 2024. The stock rallied as much as 15% during trading.

QUALCOMM Incorporated, QCOM

The previous $22 billion projection was already considered ambitious for a corporation still predominantly associated with mobile phone processors. The revised figure signals that Qualcomm is making a substantial wager on markets outside traditional handsets.

The cornerstone of this transformation is the data center sector. Qualcomm introduced the Dragonfly C1000, a server chip featuring over 250 proprietary cores. Additionally, the company launched a portfolio of AI acceleration products specifically engineered for inference workloads rather than training applications. Leadership is pursuing more than $15 billion in data center revenue by fiscal 2029, starting from essentially zero currently.

To put this in perspective, Qualcomm generated $10.6 billion in total revenue during fiscal Q2 2026. Mobile chip sales accounted for approximately $6 billion of that figure. Data center contributions remain negligible at present.

The most significant announcement wasn’t technical specifications — it was customer validation. Meta Platforms committed to a multi-year, multi-generation agreement to deploy Qualcomm’s new processor across its data center infrastructure, with production scheduled to commence in the second half of 2028. Securing Meta as a launch partner lends substantial credibility to the data center initiative.

Meta Agreement Validates Data Center Strategy

Qualcomm’s innovative High Bandwidth Compute (HBC) architecture employs vertical chip stacking instead of traditional horizontal layouts, positioning memory and processing units in closer proximity. The manufacturer claims this configuration enhances data transfer rates and power efficiency.

The initial generation of this architecture is slated to debut in data center deployments next year, with widespread commercial availability anticipated in 2028. Qualcomm is simultaneously engaging with mobile device, personal computer, and automotive manufacturers about future integration of this technology into their products.

The AI250 accelerator, built on the HBC framework, won’t enter commercial sampling until mid-2027. Meta’s CPU manufacturing doesn’t begin until late 2028. These remain forward-looking milestones rather than realized revenue.

Automotive Segment Delivers Current Results

While the data center narrative focuses on 2028 and beyond, the automotive division is generating results today. Qualcomm reported record automotive revenue of $1.3 billion in fiscal Q2 2026, reflecting 38% year-over-year expansion. The company projects $10 billion in annual automotive revenue by fiscal 2029, supported by a design-win backlog the company estimates at approximately $65 billion.

This trajectory provides tangible evidence for the broader diversification thesis. The automotive business demonstrates the strategy can succeed beyond smartphones in at least one significant market.

From a valuation perspective, the stock trades at roughly 17 times non-GAAP earnings. That multiple sits well below broader market averages and significantly trails valuations assigned to leading AI semiconductor companies — indicating the market continues to view Qualcomm primarily through the lens of its smartphone chip business.

QCOM finished Thursday at $189.39, declining 7.57% for the session, retreating from Wednesday’s investor day-driven rally.

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