Qualcomm Data Center Chips (2026): The Best Bet as Smartphone Sales Sink
Qualcomm data center chips are moving from a side project to the center of the company’s future. On its latest earnings call, the chipmaker said smartphone sales had fallen sharply, and it is now betting that the hardware powering artificial intelligence in data centers can become a much larger part of its business.
The shift is easy to understand. Smartphones have been Qualcomm’s home turf for years, but that market is shrinking for the company, while demand for AI computing keeps growing. Qualcomm data center chips are its answer to that change: chips designed for the servers that train and run AI systems, rather than for the phones in our pockets.
Why Qualcomm Data Center Chips Matter Now
The numbers behind the move are stark. In its fourth-quarter earnings call for 2026, Qualcomm said smartphone sales were down about 20 percent compared with 2025. For a company long defined by mobile chips, that is a serious drop, and it helps explain why the company is looking for growth somewhere new.
Data centers are the obvious place to look. They are the giant buildings full of servers where AI models are trained and where chatbots, search tools, and image generators run. Qualcomm data center chips are part of a business whose total revenue in 2026 was $10.4 billion, and the company now expects its data center business to grow until it eventually makes up about 30 percent of that total. That is a big ambition for a business that is only just getting started.
The Amazon and Meta Partnerships
Qualcomm is not starting from scratch. Earlier this year, the company announced partnerships with Amazon and Meta, two of the biggest buyers of data center hardware in the world. Those deals give Qualcomm data center chips a way into data centers that would be hard to win on its own, because large customers usually buy from suppliers they already trust.
Partnerships also help Qualcomm data center chips with a practical problem: new chips need real customers to prove themselves. A data center operator can test a chip at scale, find its weaknesses, and give feedback that shapes the next version. For Qualcomm, working with Amazon and Meta is a shortcut to that kind of experience, and a signal to other buyers that its chips are worth a look.
How Qualcomm Data Center Chips Could Grow
The company’s forecasts show how fast it hopes the business will grow. Qualcomm data center chips are expected to bring in about $650 million in revenue in the first quarter of 2027. The company then aims for about $5 billion by the end of 2027, and about $15 billion by 2029.
Those are targets, not guarantees, and the jump from one milestone to the next is steep. Still, the direction is clear: Qualcomm data center chips are meant to go from a small new line of business to one of the company’s main sources of revenue within a few years. If the company hits even part of those targets, data centers will change what Qualcomm is.
What the Competition Is Doing
Qualcomm is not alone in chasing this market. AMD, one of its biggest rivals, expects data centers to eventually make up more than 80 percent of its revenue. That shows how much the whole chip industry is turning toward AI infrastructure, and how crowded the field is becoming.
For buyers, more competition is usually good news. It can push chipmakers to improve performance, cut power use, and offer better prices. That competition means Qualcomm data center chips will be judged against rivals that have been selling to data centers for much longer. The company will need to prove that its chips can hold their own at scale, not just in a demonstration.
What This Means for Phone Buyers
None of this means Qualcomm is giving up on phones. Smartphones are still a huge part of its business, and the laptop AI chip in new laptops shows how much mobile technology still matters for everyday devices. But the balance is shifting, and the company’s future may depend less on how many phones are sold and more on whether Qualcomm data center chips win over data center buyers.
The next few years will show whether the bet pays off. Qualcomm data center chips have strong partners, ambitious targets, and a growing market behind them. They also have tough rivals and a long way to go. For now, the most important thing to watch is simple: whether those early forecasts turn into real revenue in 2027. You can read more about the earnings call in The Verge’s report on Qualcomm’s data center plans.
