Qualcomm Inc (NASDAQ:QCOM, XETRA:QCI) outlined higher long-term revenue and earnings targets at its investor day, prompting analysts at Bank of America and UBS to lift their estimates and price targets while maintaining differing views on execution risks.
The chipmaker increased its fiscal 2029 non-handset revenue target to $40 billion from a previous goal of $22 billion.
The updated forecast includes more than $15 billion in data center revenue, over $10 billion from automotive, and more than $14 billion from Internet of Things businesses.
Qualcomm also projected fiscal 2029 adjusted earnings per share above $18, compared with Wall Street expectations of roughly $14 to $15.
The updated forecasts were welcomed by investors who sent shares of Qualcomm up almost 6% to about $209 on Thursday afternoon.
Bank of America analysts wrote that they were impressed by Qualcomm’s revised targets, increased visibility into its data center business, and its roadmap for AI accelerators and central processing units through fiscal 2030.
The firm noted that Qualcomm expects about $5 billion in fiscal 2027 data center revenue, supported by two custom hyperscaler design wins, connectivity products and shipments of its AI200 accelerator in the second half of fiscal 2027.
Qualcomm’s data center plans now include custom silicon, connectivity products, high-bandwidth compute accelerators and AI-focused CPUs. The company also highlighted a new high-bandwidth compute architecture designed to address memory bottlenecks and improve inference efficiency.
Bank of America raised its fiscal 2027 and 2028 adjusted earnings estimates by 2% and 10%, respectively, and increased its price objective to $220 from $195.
However, the firm reiterated its ‘Underperform’ rating, writing that the stock already reflects significant data center expectations and that Qualcomm still needs to demonstrate successful ramps of custom silicon, accelerators and CPUs. The analysts also pointed to risks related to China-linked custom chip revenue and uncertainty surrounding a future renewal of Qualcomm’s licensing agreement with Apple.
UBS analysts wrote that Qualcomm’s updated fiscal 2029 revenue and earnings targets were largely in line with their expectations and appeared consistent with investor forecasts ahead of the event. They described the company’s broader data center portfolio as more extensive than previously anticipated, encompassing decode-focused AI accelerators, data center CPUs, custom application-specific integrated circuits and connectivity products.
UBS wrote that Qualcomm expects custom ASICs, including two hyperscaler customers, to account for the majority of its targeted $5 billion in fiscal 2027 data center revenue. The firm added that management expects data center revenue to exceed $15 billion by fiscal 2029 as additional products, including CPUs, begin to ramp.
The analysts highlighted Qualcomm’s announcement that Meta Platforms will be a customer for its CPU products, describing it as notable given Meta’s use of a mix of Nvidia, Arm-based and x86-based AI infrastructure.
Beyond data centers, Qualcomm raised its fiscal 2029 automotive revenue target to more than $10 billion from a prior target of about $8 billion and expanded its automotive design-win pipeline to approximately $65 billion from $45 billion around 18 months ago. The company maintained its IoT revenue target of more than $14 billion.
UBS wrote that Qualcomm’s efforts to expand from a semiconductor supplier into a full-stack platform provider, with additional software and developer tools, could support growth opportunities in edge computing, industrial applications and robotics.
The firm increased its price target to $235 and wrote that Qualcomm’s fiscal 2029 outlook should be viewed as a milestone rather than an endpoint, with management targeting more than $100 billion in annual revenue over the next five to seven years.
-
Qualcomm plans to bring data center chip tech to smartphones
Investing.com — Qualcomm said it plans to use new chip technology developed for data centers in smartphones, which would improve how artificial intelligence runs on mobile devices. Executive Vice President Durga Malladi shared the information in an interview with Semafor.
The chipmaker, which supplies smartphones and wearable devices, entered the data center chip industry this week with its announcement of new data center chips. The sector faces supply shortages and strong competition.
“What starts in data centers is not going to end there,” Malladi said.
Qualcomm is talking with manufacturers of smartphones, personal computers, and cars about its new data center technology portfolio, Malladi said. The company’s High Bandwidth Compute architecture stacks chips vertically instead of placing them side by side, which puts memory and compute closer together. This design improves data speed and flow.
The first generation of the new architecture will launch in data centers next year, with commercial availability expected in 2028. Malladi did not say when Qualcomm will add the new technology to other devices.
Chip stacking technology exists mainly in data centers rather than smartphones. When it reaches handheld devices, users will be able to run more AI models locally and operate agents in an “always on” mode without draining the battery. Qualcomm had fallen behind in data center technology for several years but holds a strong position due to its long history with smartphone chips.
https://ca.finance.yahoo.com/news/qualcomm-plans-bring-data-center-173412933.html
