Qualcomm Shares Rise on AI Software Touts, Targeting $15 Billion Data Center Revenue
Qualcomm's shares rose by 2% in premarket trading after CFO Akash Palkhiwala described the stock as 'well-priced' and outlined the company's AI software strategy. The software, acquired from Modular, allows developers to deploy models across different chip platforms, including Nvidia, AMD, and Qualcomm, with support also extending to AWS and Apple.
Palkhiwala emphasized that this was a key missing piece in Qualcomm's offering, which is now resolved at the right time as the company scales its data center products. He highlighted the company's agreement with Amazon, under which the tech giant received warrants for up to 25 million QCOM shares, with vesting linked partly to purchases hitting $60 billion over 10 years.
Qualcomm is targeting $5 billion in fiscal 2027 data center revenue and $15 billion in fiscal 2029. Palkhiwala expressed confidence in these targets, citing the company's progress with Amazon and another unnamed hyperscaler, as well as its custom-chip engagements with Meta and HUMAIN.
In addition to AI software, Qualcomm is also expanding into the automotive market, where it expects to become the largest chip supplier next year. Palkhiwala described the smartphone business as being at a cyclical low, but expressed optimism that it will recover due to changes in the market and an eventual easing of memory-related pressures.