Qualcomm pivots to AI data center chips after smartphone sales fall

Qualcomm is shifting its business focus to data centers as smartphone sales fell by around 20 percent compared to 2025, The Verge reported. During its fourth-quarter earnings call for fiscal 2026, the company outlined plans to expand its presence in the artificial intelligence data center sector. [1]

The company established partnerships earlier this year with firms including Amazon and Meta to support its data center plans, according to The Verge. Qualcomm projects its data center division will generate approximately $650 million in revenue during the first quarter of fiscal 2027. Executives expect that data center chips will ultimately make up 30 percent of the overall business. [1]

Qualcomm is based in San Diego, California, and designs semiconductors alongside mobile and computing technologies. Its subsidiary designs Snapdragon processors used in smartphones, automotive systems, internet of things equipment, and artificial intelligence applications. The company holds patents for global mobile communication standards, including 4G LTE and 5G networks. [2][3]

The hardware manufacturer operates through two primary divisions, separating chipset development from intellectual property licensing. In the first quarter of fiscal 2026, the company generated $12.25 billion in revenue, which was a 5 percent increase year over year, driven by expansion outside the mobile phone market. [3]