Qualcomm (NASDAQ: QCOM) is positioning itself as a newer entrant in the AI data center space, but analysts remain cautious about the pace of execution.
At a recent analyst day, Qualcomm outlined targets of $5 billion in data center revenues across accelerators, CPUs, and related products within the next year.
The company also projected $15 billion in data center revenues within a few years, figures that represent a significant strategic ambition for the chipmaker.
Bernstein managing director and senior analyst Stacy Rasgon noted that while those numbers are large for Qualcomm, they remain modest relative to a market that could approach a trillion dollars.
Rasgon framed the bull case plainly, suggesting the company “could just get a tiny slice of a big, big pie and for them that’s enough,” describing the analyst day numbers as “actually pretty positive.”
However, Rasgon was less optimistic about Qualcomm’s core smartphone business, citing weakness across the Android ecosystem where the company holds its strongest competitive position.
He pointed to rising memory prices as a key factor, with AI demand absorbing significant supply and leaving less available for smartphone manufacturers, while unit growth has also turned negative.
Adding further pressure, Qualcomm sells chips to Apple (NASDAQ: AAPL), which is in the process of designing Qualcomm out of its supply chain, with a sizable revenue step-down expected in the December quarter as new Apple models arrive.
Rasgon acknowledged the diversification story as real and meaningful, noting that auto, industrial, and now data center exposure are all helpful, but pointed out that handsets still represent approximately 70% of Qualcomm’s chipset revenue.
Lopez Research founder Maribel Lopez echoed a cautiously optimistic tone, stating “I think we still have execution risk, but I think the strategy is sound.”
Lopez highlighted that securing even a small portion of the rapidly growing data center market would be a positive outcome, but cautioned that winning data center design contracts is a time-consuming process.
She concluded that investors remain in “a wait and see mode on Qualcomm to see how quickly they can execute on the strategy they’ve laid out,” suggesting the company’s near-term trajectory hinges on operational delivery rather than strategic vision alone.
