Shares of Qualcomm jumped more than 12% in premarket trading on Thursday after the semiconductor company raised its long-term revenue targets and disclosed major partnerships with two leading technology companies, reinforcing investor confidence in its artificial intelligence strategy.
The rally came alongside renewed optimism across the semiconductor sector following stronger-than-expected results from Micron Technology, which helped revive enthusiasm for AI-related stocks.
Qualcomm Raises Non-Handset Revenue Target
Qualcomm increased its fiscal 2029 non-handset revenue target to $40 billion, nearly double its previous forecast. The company also projected approximately $15 billion in annual data center revenue by that time.
The updated targets highlight Qualcomm's efforts to diversify beyond its traditional smartphone business and become a larger player in AI infrastructure and enterprise computing.
By fiscal 2029, Qualcomm expects handset-related revenue to account for only about one-third of total sales, compared with roughly 72% in fiscal 2025.
Meta and Microsoft Join as Customers
During its investor day presentation, Qualcomm disclosed that two major technology companies will adopt its future data center products:
- Meta Platforms plans to use Qualcomm's Dragonfly C1000 central processing units beginning in 2028.
- Microsoft intends to deploy Qualcomm's High Bandwidth Compute architecture, which is expected to launch in mid-2027.
These partnerships provide important validation for Qualcomm's expansion into AI infrastructure and cloud computing markets.
AI Spending Concerns Ease
The announcements arrived at a time when investors have become increasingly concerned about whether large technology companies can sustain massive investments in AI infrastructure and data centers.
Strong earnings and guidance from Micron Technology earlier this week helped alleviate some of those concerns by demonstrating continued demand for AI-related memory chips.
Qualcomm's customer wins suggest that hyperscale cloud providers continue to invest heavily in next-generation computing infrastructure.
Analysts Remain Cautious
Despite the positive market reaction, some analysts remain cautious about Qualcomm's long-term data center opportunity.
KeyBanc analyst John Vinh said the company's data center targets exceeded expectations but noted that the business remains in its early stages.
Meanwhile, Susquehanna analyst Christopher Rolland raised his price target on Qualcomm shares to $190 from $160 while maintaining a Neutral rating, citing ongoing challenges in the smartphone market.
Market Impact
The strong premarket gains pushed Qualcomm shares to approximately $221, significantly above several analyst price targets and reflecting renewed optimism about the company's ability to become a meaningful player in AI infrastructure.
Investors will now focus on whether Qualcomm can successfully execute its diversification strategy and establish itself as a major supplier of chips for data centers and artificial intelligence workloads over the coming years.
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