Qualcomm Bets Big on Data Centers with $15B Target, Meta CPU Deal, and CUDA Rival

Qualcomm shares surged 15% in after-hours trading after the company dramatically raised its non-handset revenue forecast to $40 billion by fiscal 2029 — nearly double its prior $22 billion target. The announcement came at an investor presentation where the company laid out an aggressive push into the data center market, targeting $15 billion in data center sales alone by that year. Its updated EPS target of over $18 per share for fiscal 2029 significantly tops the analyst consensus of $15.26.

The centerpiece of the data center push is a new CPU called the Dragonfly C1000, purpose-built for agentic AI workloads — the kind that run autonomously without constant human input. Meta has already signed on as a customer and will begin production using the chip in 2028. Qualcomm says the Dragonfly C1000 is designed to maximize compute performance per watt, a key selling point as hyperscalers face hard limits on how much electricity their data centers can consume.

Beyond the Dragonfly C1000, Qualcomm outlined a broader data center product roadmap that includes a dedicated AI accelerator chip and a multi-chip interconnect product. The company also revealed it has secured two custom silicon deals with unnamed hyperscalers, and CFO Akash Palkhiwala noted that Qualcomm already has established relationships with nearly every major cloud provider through its existing edge and smartphone chip business — framing the data center move as a natural extension rather than a cold start.

In a significant software play, Qualcomm acquired startup Modular for an undisclosed sum. Modular built software that lets AI applications run across diverse chip architectures — positioning it as a direct alternative to Nvidia's CUDA ecosystem, which currently dominates AI software infrastructure. Gaining a CUDA equivalent could be critical for Qualcomm to attract developers and enterprises who build AI workloads.

Qualcomm's smartphone business still dominates today, accounting for roughly two-thirds of product revenue as of the March quarter. The company is also expanding into automotive — growing its design-win pipeline to $65 billion and targeting $10 billion in auto revenue by fiscal 2029 — plus robotics. CEO Cristiano Amon pushed back on concerns about entering the data center market late, arguing that Qualcomm's engineering depth, supply chain, and operational scale are what matter most at this stage of the AI infrastructure buildout.