QCOM Raises 2029 Non-Handset Target to $40B

Qualcomm doubles its FY2029 non-handset revenue target to $40B, unveils the Dragonfly C1000 datacenter CPU, and lands Meta as its first hyperscaler customer.

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What Happened

At its Investor Day presentation, Qualcomm raised its fiscal 2029 non-handset revenue target to $40 billion, up from a prior projection of $22 billion. The revised figure breaks down into $15 billion from datacenter chip sales, $14 billion from Internet of Things, and $10 billion from automotive — each a material step up from previous guidance.

Within the datacenter segment, Qualcomm set an intermediate milestone of $5 billion by fiscal 2027, ahead of reaching the $15 billion mark in 2029. The company introduced the Dragonfly C1000, a data-center central processing unit engineered for agentic AI workloads, with an emphasis on compute throughput at reduced power consumption.

Meta confirmed it will adopt the Dragonfly C1000 when the chip enters production in 2028, representing Qualcomm's most significant hyperscaler partnership to date. Microsoft will separately deploy Qualcomm's HBC chips across its cloud infrastructure.

Qualcomm also announced plans to acquire Modular, a move intended to strengthen the company's AI software stack and accelerate silicon adoption across datacenter deployments.

Market Reaction

QCOM closed the regular session on June 24 at $197.32, down 3.3% amid broader semiconductor pressure. After the Investor Day disclosures, the stock reversed sharply, climbing to approximately $222.97 in extended trading — a gain of roughly 13% to 15%. The after-hours move wiped out several sessions of losses and placed the stock at a multi-month intraday high.

The magnitude of the rally reflected investor relief that Qualcomm's diversification away from smartphone chips was advancing faster than anticipated, and with more tangible customer commitments than prior targets had suggested.

Strategic Context

Qualcomm has been telegraphing a pivot beyond handsets for several years, but the Investor Day marked the first occasion on which the company paired aggressive financial targets with named hyperscaler deployments. Its Snapdragon-driven handset business remains highly profitable but carries exposure to the smartphone upgrade cycle and concentration risk among a narrow group of Android device manufacturers.

By targeting $40 billion in non-handset revenue by fiscal 2029 — against a fiscal 2025 total revenue base of roughly $40 billion across all segments — Qualcomm is positioning mobile to represent less than half of its overall revenue mix within three years.

The automotive design-win pipeline expanded to $65 billion, with a $10 billion annual revenue target by fiscal 2029. IoT projections were broken down into $8 billion from industrial, networking, and robotics, and $6 billion from personal AI and compute.

AI and Technology Angle

The Dragonfly C1000 sits at the center of Qualcomm's datacenter thesis. Designed to handle the continuous, multi-step inference loops characteristic of agentic AI systems, the chip enters an increasingly competitive market alongside offerings from Nvidia, AMD, and custom silicon developed by hyperscalers themselves.

Qualcomm's differentiation centers on power efficiency — a critical variable as datacenter operators confront rising electricity costs — and on software portability supported by the planned Modular acquisition. The company targets total adjusted earnings per share of more than $18 for fiscal 2029, reflecting anticipated operating leverage from higher-margin datacenter and automotive businesses.

The $5 billion datacenter revenue waypoint for fiscal 2027 will serve as an early test of whether the Dragonfly ramp and existing design wins can convert into material shipment volumes within roughly 18 months of the chip's production start.

Outlook

Qualcomm's doubled non-handset target and the Meta partnership provide the market with tangible anchors for the company's datacenter ambitions. Execution risk remains: the Dragonfly C1000 enters production in 2028, leaving a narrow ramp window before the fiscal 2029 deadline, while automotive and IoT revenue trajectories each depend on multi-year design cycles that must accelerate in parallel. Near-term attention will center on fiscal 2026 and 2027 datacenter pipeline disclosures and any additional hyperscaler customer wins that validate the $15 billion target.