Qualcomm has spent months preparing for this announcement, and it paid off. The company’s shares jumped 5.3% in early trading Thursday after it named Meta Platforms as the customer for its new Dragonfly C1000 data center CPU. Qualcomm also nearly doubled its non-handset revenue target to $40 billion by fiscal 2029. These updates were shared at Qualcomm’s investor day on Wednesday evening, along with news of a $3.9 billion deal to acquire AI software company Modular. These moves highlight Qualcomm’s growing data center ambitions and raise the question of whether it can compete with Nvidia.
Meta plans to use the Dragonfly C1000 CPUs when they launch in 2028. Microsoft’s Azure cloud division will use Qualcomm’s High Bandwidth Compute chip architecture, which is expected in mid-2027. According to Qualcomm’s chief financial officer, the HBC design combines logic and memory components to deliver high performance and bandwidth while using less power. This helps address rising energy costs in data centers.
Qualcomm’s new revenue goals are ambitious. The company raised its 2029 data center revenue target to $15 billion, as part of a larger $40 billion non-handset revenue goal, almost double its earlier forecast. As the data center business grows, handsets are expected to drop from 72% of revenue in 2025 to about one-third by 2029.
Buying Modular brings a software angle to Qualcomm’s strategy. Modular has created an AI programming language that serves as an open-source alternative to Nvidia’s popular CUDA software. Qualcomm wants to make this software work on both its own chips and those from other companies, which could help it spread more quickly across the industry.
Analysts had mixed reactions. KeyBanc kept a Sector Weight rating and described Qualcomm’s data center efforts as still in the early stages. Susquehanna raised its price target to $190 from $160 but kept a Neutral rating, noting challenges in the mobile market. Strong earnings from Micron, reported the same evening, also boosted the S&P 500 by 0.3% on Thursday.
