Qualcomm CEO Sees Handset Bottom, “Multiple Billions” in Data Center Revenue Ahead

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Qualcomm (NASDAQ:QCOM) President and CEO Cristiano Amon said the company’s diversification strategy is progressing crossed automotive, IoT and information halfway markets, portion its halfway handset concern remains constrained by elevated representation costs alternatively than end-market demand.

Speaking with Bernstein Senior Research Analyst Stacy Rasgon, Amon described handsets arsenic a “stable business” for Qualcomm and said the institution has focused since 2021 connected expanding stock of wallet, improving premix and prioritizing premium and high-tier devices. He said Qualcomm is “significantly under-shipping to user demand” due to the fact that of memory-related constraints, giving the institution assurance that its ain handset concern tin bottommost successful the fiscal 3rd 4th and amended sequentially afterward.

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Amon said Qualcomm’s stock astatine Samsung, historically astir 50%, present has a baseline “north of 70%.” He besides said Snapdragon has go much applicable successful a smaller marketplace arsenic customers prioritize premium-tier designs.

Data Center Push Includes CPUs, Inference Accelerators and ASICs

Amon said information halfway is the “next step” successful Qualcomm’s enlargement and represents a ample full addressable market. He outlined 3 large parts of the strategy: CPUs, XPUs focused connected inference acceleration and customized ASICs.

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On CPUs, Amon said Qualcomm has designed a processor specifically for information halfway usage and argued that the company’s way grounds successful smartphones, PCs and automotive demonstrates its capabilities successful performance, powerfulness depletion and full outgo of ownership. He said Qualcomm’s CPU architecture is flexible capable to standard from ample information centers to on-premises deployments and could besides beryllium utilized arsenic a chiplet successful customized designs.

For inference accelerators, Amon said the institution is not focused connected grooming but connected disaggregated inference workloads. He said Qualcomm’s XPU architecture does not necessitate HBM and that the institution is gathering chips, cards, servers and racks depending connected lawsuit deployment needs. Amon said the company’s archetypal publically discussed HUMAIN declaration is tied to accelerators, not CPUs, and that Qualcomm has pulled expected information halfway gross from fiscal 2028 into fiscal 2027.

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Amon besides discussed Qualcomm’s customized ASIC opportunity, saying the institution expects shipments to statesman successful calendar 2026 and that 2027 should go “material” for information halfway revenue. When Rasgon asked what “material” means astatine Qualcomm’s scale, Amon said it would person to mean “multiple billions of dollars.” He said these information halfway efforts are expected to beryllium operating borderline accretive, though gross borderline volition alteration depending connected whether engagements impact chips, cards, servers oregon racks.