Qualcomm pivots toward AI data centers as smartphone sales drop

Qualcomm announced plans during its fourth-quarter 2026 earnings call to expand its presence in the artificial intelligence data center business. The Verge reported that the shift comes as smartphone sales fell by approximately 20 percent compared to 2025 levels. The San Diego, California-based company designs semiconductors, smart device technologies, and mobile processors. [1][2]

To offset declining mobile hardware sales, Qualcomm announced partnerships with companies such as Amazon and Meta. The Verge reported that Qualcomm forecasts roughly $650 million in data center revenue during the first quarter of 2027. Qualcomm expects data center hardware will eventually account for 30 percent of its total business. [1]

The semiconductor firm operates through a dual-segment structure, which includes Qualcomm CDMA Technologies for chipsets and Qualcomm Technology Licensing for intellectual property royalties. The company designs Snapdragon processors used in mobile devices, artificial intelligence applications, automotive technology, and the internet of things. It also holds essential patents for global 4G and 5G mobile communication standards. [2][3]

In the first quarter of fiscal 2026, Qualcomm reported $12.25 billion in total revenue, which was a 5 percent increase year-over-year. The company recorded non-GAAP earnings per share of $3.50 during that period, driven by business diversification beyond mobile handsets. [3]