Qualcomm Shifts Focus from Laptops to Data Centers as Non-Handset Revenue Targets Rise
Qualcomm has shifted its strategic focus away from laptops, which were once central to the company's growth narrative. Two years ago, it emphasized automotive and IoT markets; now, data centers have become a key area of expansion. In fiscal Q3 2026, Qualcomm raised its non-handset revenue target for 2029 to $40 billion from $22 billion previously, with over $15 billion expected in the data center segment alone. The company is positioning itself as a new entrant in the data center market and has secured custom silicon wins that are projected to generate significant early revenue. However, these initial engagements carry lower margins than its core business, potentially dragging down overall gross margin by 1.5% to 2%. Meanwhile, automotive sales have surged, with fiscal Q3 revenues hitting a record $1.6 billion. Despite the strategic pivot and growth in specific segments like automotive, Qualcomm's broader revenue has grown modestly—just 1.9% over the past twelve months compared to an average of 4.8%. The company’s stock performance lagged behind the S&P 500 last year, with shares currently trading about 30% below their 52-week high.
Topics: business strategy data center non-handset revenue Qualcomm