Why Qualcomm Stock Popped Today
Key Points
Qualcomm could become a formidable force in the rapidly expanding data center market.
Management ramped up its long-term sales and profit forecast.
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Shares of Qualcomm (NASDAQ: QCOM) rose on Thursday after the chipmaker unveiled its new artificial intelligence (AI)-fueled growth targets.
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Entering the data center arena
Qualcomm has long been a dominant supplier of processors for smartphones. It's a large and lucrative market, but its pace of expansion pales in comparison to explosive growth markets like AI data centers.
Qualcomm knows this -- and it wants a larger share of the AI boom. At its 2026 Investor Day, the semiconductor giant introduced its Dragonfly C1000 CPU that's designed to run agentic AI workloads.
As AI agents drive demand for AI inference, "infrastructure has to deliver much higher performance at lower power and cost," according to Qualcomm CEO Cristiano Amon. That plays right into Qualcomm's wheelhouse, as power efficiency is particularly important in smartphones and other small mobile devices.
Social media and cloud computing colossus Meta Platforms has already signed on as a customer. Meta intends to use Qualcomm's new Dragonfly C1000 CPU to power its next-generation data centers beginning in the second half of 2028.
Ramping up long-term growth targets
Qualcomm expects the C1000 and other AI-related products to help its non-handset revenue grow to $40 billion in fiscal 2029, which is roughly double its prior forecast. Management is also targeting over $18 in adjusted earnings per share by this time.
"Our presence across the entire compute continuum and unparalleled technology capabilities, in low-power computing, AI, and connectivity, put us in a strong position to capture these opportunities," Amon said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Qualcomm. The Motley Fool has a disclosure policy.
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