Qualcomm stock jumps on AI data center push, Meta and Microsoft deals

Qualcomm shares climbed on Thursday after the chipmaker outlined an expanded push into artificial intelligence data centers, raised its long-term revenue targets, and unveiled new partnerships with Meta Platforms and Microsoft.

Shares rose 8% in the trading session. It lost some of the gains and at the time of writing, QCOM shares was up 4.34% at $205.88.

AI data center push and long-term revenue targets

During its investor day, Qualcomm lifted its fiscal 2029 non-handset revenue target to $40 billion, nearly double its prior guidance.

The company also projected $15 billion in data center revenue by that time.

The chipmaker said the shift reflects a broader diversification strategy away from its traditional reliance on smartphones, tablets, and gaming devices.

Qualcomm expects handsets to account for just one-third of total revenue by fiscal 2029, down from 72% in fiscal 2025.

Qualcomm CFO Akash Palkhiwala said, “While we're coming in late, we're coming in with technology advantages and something unique that solves the problems that these companies have.”

Meta and Microsoft partnerships expand AI footprint

A key highlight of the investor day was Qualcomm’s announcement that Meta Platforms would adopt its new Dragonfly C1000 central processing units once they become available in 2028.

Microsoft’s Azure cloud division will also use Qualcomm’s High Bandwidth Compute (HBC) chip architecture, expected to launch in mid-2027.

Qualcomm announced on Wednesday that it has agreed to acquire artificial intelligence infrastructure software company Modular in a $3.9 billion all-stock transaction as it seeks to expand its AI portfolio.

The company said Modular’s technology, including an AI programming language designed to compete with Nvidia’s CUDA, will support Qualcomm’s broader goal of building an open AI software stack.

“The entire strategy here is to have an industry standard stack that is completely open source that can be deployed by any customers, on Qualcomm chips, but also on competitive chips,” Palkhiwala said.

Analyst reactions and competitive challenges

The announcements come at a time when chip stocks have faced volatility, with investors questioning the sustainability of hyperscaler spending on AI infrastructure.

Some analysts remain cautious despite the long-term outlook. KeyBanc’s John Vinh said, “While data-center targets exceeded our expectations, we think it's early days,” while maintaining a Sector Weight rating.

Susquehanna analyst Christopher Rolland raised his price target to $190 from $160 but kept a Neutral rating, citing “headwinds in the mobile market.”

Morgan Stanley upgraded Qualcomm to Equal Weight from Underweight, noting it had “been wrong to be skeptical.”

Morgan Stanley analyst Joseph Moore said Qualcomm’s forecast of $5 billion in AI data center revenue by fiscal 2027 positions the company among the emerging beneficiaries of the artificial intelligence buildout, but noted that the projected three-year growth trajectory remains a “show-me story.”

However, other firms remained divided, with BofA maintaining an Underperform rating and warning that while long-term targets are stronger, the stock may already reflect significant expectations for data center success.