Compliance
Qualcomm Projects Significant Data Center Revenue Growth with Custom Chip Shipments
Qualcomm is set to redefine its market presence beyond smartphone chips as it projects substantial growth in its data center revenue. In its recent fiscal Q4 2026 earnings release, the company announced expectations of over $650 million in data center revenue for the December quarter, surpassing the entire revenue of the previous fiscal year.
This guidance signals a pivotal transition for Qualcomm, as it begins shipping custom AI accelerators and connectivity solutions to major cloud clients, including Amazon Web Services (AWS). The deal with AWS, signed in September 2026, focuses on AI inference workloads and is projected to contribute significantly to Qualcomm's revenue in FY2027.
Qualcomm's CFO, Akash Palkhiwala, highlighted that the upcoming quarter will mark the official start of the company's data center revenue stream. The company is targeting $5 billion in data center revenue for the full fiscal year 2027, a tenfold increase from fiscal 2026's total of $476 million.
In addition to AWS, Qualcomm is also engaging with other global-scale hyperscalers, with expectations that both major clients will generate at least $1 billion each in FY2027. This shift comes at a time when Qualcomm's traditional handset chip revenue has seen a decline, emphasizing the importance of diversifying its revenue streams.
As Qualcomm navigates this transition, the focus will be on execution and the ability to meet ambitious targets. The upcoming quarterly results will be crucial in assessing the company's progress in establishing a strong foothold in the data center market.
FAQ
What is Qualcomm's projected data center revenue for the December quarter?
Qualcomm projects over $650 million in data center revenue for the December quarter, which surpasses the entire revenue of the previous fiscal year.
Which major client is Qualcomm partnering with for its data center initiatives?
Qualcomm has signed a deal with Amazon Web Services (AWS) to supply custom AI accelerators and connectivity solutions for AI inference workloads.
What is Qualcomm's revenue target for the full fiscal year 2027 in the data center segment?
Qualcomm is targeting $5 billion in data center revenue for the full fiscal year 2027, representing a tenfold increase from fiscal 2026's total of $476 million.
How does Qualcomm's shift to data center revenue relate to its traditional business?
The shift to data center revenue is crucial for Qualcomm as its traditional handset chip revenue has declined, highlighting the need to diversify its revenue streams.
What are Qualcomm's expectations regarding revenue generation from major clients in FY2027?
Qualcomm expects that both AWS and other global-scale hyperscalers will generate at least $1 billion each in revenue for FY2027.