Qualcomm Forecasts $15 Billion Data Centre Revenue by 2029

What happened

Qualcomm announced it anticipates $15 billion in sales from its data centre business by 2029. The forecast was released alongside strong earnings and guidance from fellow chipmaker Micron, which reported $22 billion in customer commitments for memory chips. Qualcomm shares surged 12% in premarket trading, while Micron gained 17%. The announcements helped reignite the AI rally after recent market volatility, with the Nasdaq 100 futures rising 2.1%, Japan's Nikkei jumping 4.6%, and South Korea's KOSPI gaining 5.4%.

Why it matters

The $15 billion revenue target marks Qualcomm's strategic push into the data centre and AI infrastructure market, a segment traditionally dominated by competitors like Intel and AMD. This diversification reduces Qualcomm's reliance on its core smartphone chip business and positions the company to capture growth in AI computing demand. The positive market reaction-with Qualcomm shares up 12% premarket-reflects investor confidence in the chipmaker's ability to deliver on ambitious expansion plans. The rally also helped ease broader concerns about stretched valuations in AI-related stocks, which had weighed on markets earlier in the week, with the Nasdaq 100 falling 3.3% on Tuesday.

Bigger picture

Qualcomm's forecast comes at a critical moment for the semiconductor sector, as investors scrutinise whether AI-driven earnings growth can justify elevated valuations. Analysts at Barclays noted that markets expect continued double-digit earnings growth into 2027, with the margin for disappointment narrowing. Micron's $22 billion in customer commitments and Qualcomm's data centre ambitions suggest robust demand for AI infrastructure components, spanning memory chips and processors. The tech rally occurred alongside falling oil prices-Brent crude dropped 9% this week to $73.2 per barrel-and easing inflation pressures, which may influence central bank rate decisions. However, the strengthening dollar and persistent inflation (U.S. PCE rose 0.4% in May) complicate the macro outlook.

What to watch

Monitor Qualcomm's progress in securing data centre design wins and customer partnerships, particularly with cloud hyperscalers and AI infrastructure providers. Key metrics include revenue growth in the data centre segment and market share gains against established competitors. Watch for updates on Qualcomm's AI chip roadmap and any partnerships that validate the $15 billion sales target. Broader semiconductor sector earnings will also signal whether AI demand remains robust enough to support current valuations. Additionally, track Federal Reserve rate decisions and inflation trends, as these will influence investor appetite for growth-oriented tech stocks.