Qualcomm (QCOM) Stock Surges 15% as Meta Deal Puts Data Center Ambitions on the Map

TLDR

• Qualcomm raised its fiscal 2029 non-handset revenue target to ~$40 billion, up from $22 billion
• The company set a new data center revenue target of more than $15 billion by fiscal 2029
• Meta agreed to a multi-year deal to use Qualcomm’s new Dragonfly C1000 server processor
• Qualcomm’s automotive revenue hit a record $1.3 billion in Q2 FY2026, up 38% year over year
• QCOM stock jumped as much as 15% on the news before pulling back

Qualcomm held its investor day on Wednesday and came in swinging. The company nearly doubled its fiscal 2029 non-handset revenue target, raising it to roughly $40 billion from $22 billion set back in 2024. The stock jumped as much as 15% on the day.

QUALCOMM Incorporated, QCOM

The old $22 billion target was already a stretch goal for a company whose identity is still tied to smartphone chips. The new number makes clear that Qualcomm is betting heavily on life beyond the handset.

The centrepiece of that bet is the data center. Qualcomm announced the Dragonfly C1000, a server processor built around more than 250 custom cores. It also unveiled a line of AI accelerators designed to run AI models rather than train them. Management is targeting more than $15 billion in data center revenue by fiscal 2029, up from almost nothing today.

For context, Qualcomm’s total revenue in fiscal Q2 2026 was $10.6 billion. Handset chips still made up roughly $6 billion of that. Data center revenue barely registers by comparison.

The biggest headline from the event wasn’t a chip spec — it was a customer. Meta Platforms signed a multi-year, multi-generation deal to use Qualcomm’s new processor in its data centers, with production set to begin in the second half of 2028. Landing Meta as an early adopter gives the data center push real credibility.

Meta Deal Anchors the Data Center Push

Qualcomm’s new High Bandwidth Compute (HBC) architecture stacks chips vertically rather than side by side, placing memory and compute closer together. The company says this design improves data throughput and efficiency.

The first generation of the architecture is set to launch in data centers next year, with commercial availability expected in 2028. Qualcomm is also in talks with smartphone, PC, and car makers about eventually bringing this technology to their devices.

The AI250 accelerator, based on the HBC architecture, won’t begin commercial sampling until mid-2027. Meta’s CPU production doesn’t start until late 2028. These are still future events, not revenue on the books.

Automotive Is Already Delivering

While the data center story is a 2028 and beyond play, automotive is already moving. Qualcomm posted a record $1.3 billion in automotive revenue in fiscal Q2 2026, up 38% year over year. The company is targeting $10 billion in annual automotive revenue by fiscal 2029, backed by a design-win pipeline it values at around $65 billion.

That kind of momentum gives the broader diversification story more grounding. Automotive is proof the strategy works in at least one market.

On valuation, the stock trades at around 17 times non-GAAP earnings. That’s well below the broader market and a fraction of what the major AI chip names command — suggesting the market is still pricing Qualcomm primarily as a smartphone chip supplier.

QCOM closed Thursday at $189.39, down 7.57% on the day, pulling back from Wednesday’s post-investor day surge.

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