Qualcomm $QCOM unveiled a comprehensive data center AI strategy at its 2026 Investor Day on Wednesday, announcing that Meta $META Platforms would use its new Dragonfly C1000 central processing units and raising its fiscal 2029 non-handset revenue target to $40 billion, roughly double its prior guidance.
Availability of the Dragonfly C1000 CPUs is expected in 2028, at which point Meta has committed to deploying them, according to Barron's. Another design in the Dragonfly portfolio, the High Bandwidth Compute chip architecture, is slated for mid-2027 and has been tapped by Microsoft $MSFT's Azure cloud unit.
Qualcomm set a data center revenue target of more than $15 billion by fiscal 2029, out of a broader non-handset target of $40 billion. The company also targets more than $18 in non-GAAP earnings per share by that year. Handsets, which accounted for 72% of chip revenues in fiscal 2025, are projected to shrink to roughly one-third of that figure by fiscal 2029.
"We are defining Qualcomm's next chapter as we accelerate our edge diversification strategy, introduce a comprehensive roadmap for next-generation AI data centers, and evolve into a platform company," Qualcomm President and CEO Cristiano Amon said in a statement.
Trading ahead of Thursday's opening bell saw Qualcomm shares climb 11%.
Smartphones, tablets, and gaming devices have long formed the core of Qualcomm's business, and the data center initiative reflects the company's effort to reduce its dependence on those categories. The company also set fiscal 2029 targets of $10 billion in automotive revenues and more than $14 billion in IoT revenues, and it identified a combined total addressable market of approximately $1.7 trillion across its target segments by 2030.
The investor day announcements came on the same day Qualcomm agreed to acquire AI software startup Modular in an all-stock deal valued at $3.92 billion. Modular builds software that allows AI models to run across different hardware architectures without requiring developers to rewrite code for each processor, supporting CPUs, GPUs, NPUs, and custom chip architectures. Qualcomm said the acquisition is intended to deepen its software capabilities for data center AI inference, orchestration, and deployment.