TLDR
- QCOM stock rose 5.3% in early trading after a premarket surge of over 10%
- Qualcomm raised its fiscal 2029 non-handset revenue target to $40 billion, nearly double the previous guidance
- Meta will use Qualcomm’s Dragonfly C1000 CPUs from 2028; Microsoft Azure will use its HBC chip architecture from mid-2027
- Qualcomm also announced a $3.9 billion acquisition of AI software company Modular
- Analyst price targets ranged from $190 (Susquehanna) to $300 (Benchmark), with mixed ratings
Qualcomm stock jumped Thursday after the chipmaker finally named two of its biggest data-center customers — Meta Platforms and Microsoft — and nearly doubled its long-term revenue targets.
QCOM was up 5.3% in early trading Thursday, after surging more than 10% in premarket hours. The stock had climbed around 12% in after-hours trading on Tuesday following Qualcomm’s Investor Day presentation.
At that event, Qualcomm revealed Meta will use its Dragonfly C1000 CPUs when they launch in 2028. Microsoft’s Azure division will adopt Qualcomm’s High Bandwidth Compute (HBC) chip architecture, expected to arrive in mid-2027.
Qualcomm CFO Akash Palkhiwala told Barron’s the HBC chip combines logic and memory components to deliver high performance and bandwidth at low power.
The company said both hyperscale custom-silicon deals are expected to generate more than $1 billion in revenue each by fiscal 2027.
Qualcomm also raised its fiscal 2029 non-handset revenue target to $40 billion, up from $22 billion previously. Data-center sales alone are expected to hit $15 billion by that year.
A Big Pivot Away From Smartphones
Handsets currently make up 72% of Qualcomm’s fiscal 2025 revenue. The company expects that to fall to just one-third by fiscal 2029 as it pushes further into data centers and AI.
“While we’re coming in late, we’re coming in with technology advantages and something unique that solves the problems that these companies have,” Palkhiwala said.
To support that shift, Qualcomm announced a $3.9 billion deal to acquire Modular, an AI infrastructure software company. Modular has built an AI programming language intended to rival Nvidia’s widely used CUDA platform.
“The entire strategy here is to have an industry standard stack that is completely open source that can be deployed by any customers, on Qualcomm chips, but also on competitive chips,” Palkhiwala said.
Qualcomm also announced an expanded partnership with Hugging Face to boost AI development across data center and AI storage infrastructure.
Analyst Reactions
Benchmark raised its price target to $300 from $225, the highest among analysts, maintaining a Buy rating. The firm said Qualcomm had successfully shifted investor focus from handset-cycle risks toward edge-to-cloud AI infrastructure.
Morgan Stanley upgraded QCOM from Underweight to Equalweight, lifting its target to $231, citing strong fiscal 2027 data-center revenue guidance.
Susquehanna raised its target to $190 from $160 but kept a Neutral rating, pointing to “headwinds in the mobile market.”
Bank of America raised its target to $220 from $195 but kept an Underperform rating. BofA acknowledged the upgraded guidance but argued the stock “already embeds meaningful data center success” and flagged risks around unproven custom silicon ramps.
Cantor Fitzgerald also lifted its target to $220, holding a Neutral rating.
KeyBanc analyst John Vinh stayed at Sector Weight, saying “it’s early days” despite targets exceeding expectations.
BofA also flagged an Apple QTL renewal risk as a potential high-margin overhang.
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