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The Verge AI

Qualcomm pivots to AI data centers as smartphone sales slump

Qualcomm reported a 20% drop in smartphone sales compared to 2025, prompting a strategic shift toward AI data centers. The company announced partnerships with Amazon and Meta and forecasts $650 million in data center revenue for Q1 2027, growing to $5 billion by end of 2027 and $15 billion by 2029. This move aims to offset declining handset revenue.

AI Brief

Provides concrete financial forecasts and strategic direction for Qualcomm's AI data center expansion, relevant to industry watchers.

Qualcomm logo over a multicolored illustration

With smartphone sales tanking by around 20 percent compared to 2025, Qualcomm is looking to data centers to help boost its bottom line. During its Q4 2026 earnings call, the company laid out its plans to make a splash in the AI data center business, through partnerships with companies like Amazon and Meta announced earlier this year. The company expects that portion of its business to grow quickly, forecasting around $650 million in data center revenue during the first quarter of 2027. But it anticipates that will reach $5 billion by the end of 2027 and $15 billion by 2029.

Considering the company's total revenue for 2026 was $10.4 billion, …

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