Qualcomm (QCOM) made its mark as a smartphone chip designer. But smartphone growth has slowed, and after losing Apple (AAPL) as a key customer, the company began searching for a way to move beyond the handset market.
At its investor day on Wednesday, Qualcomm demonstrated how it plans to do that, revealing a line of data center components and servers and announcing it is nearly doubling its fiscal 2029 non-handset revenue projections to $40 billion.
The company initially began its push to reduce its dependence on smartphone revenue by turning toward edge devices — products including laptops, smart glasses, and self-driving vehicle technologies. Now it's looking beyond that to grab a piece of the AI data center explosion.
"We used to be a smartphone company, now we're an edge device company, and the next phase of Qualcomm is getting into rack scale infrastructure, and this is the proof that we're doing that in real time," Qualcomm CFO Akash Palkiwala told Yahoo Finance on the sidelines of the company's investor day event in New York City.
Qualcomm is offering up its own AI accelerator, new memory products, a new CPU, networking capabilities, and full-rack servers to create what it calls a turnkey solution for companies looking for alternatives to Nvidia's platforms and services.
And if the strategy works, it could pay off handsomely for Qualcomm.
"Across these four, we gave a revenue target of $5 billion in fiscal 207, which starts in three months, and a revenue target of $15 billion in fiscal 2029," Palkiwala said.
So far, investors are on board. Qualcomm stock jumped 13% after Palkiwala announced the company's data center revenue projections and rose 7% through midday Thursday.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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