Qualcomm unveiled its Dragonfly C1000 data center CPU with Meta as a launch customer, acquired AI software startup Modular for a reported ~$3.92 billion, and nearly doubled its 2029 non-handset revenue forecast to $40 billion, sending shares up 15%.
Qualcomm shares surged 15% in extended trading on Wednesday after the chipmaker nearly doubled its non-handset revenue projection for fiscal 2029 to $40 billion, up from a prior forecast of $22 billion, and unveiled a data center CPU with Meta as its first major customer.
The company made the announcements at an investor day event, where it also disclosed a $15 billion data center revenue target for fiscal 2029 and said it expects total adjusted earnings of more than $18 per share that year. Analysts polled by LSEG had previously set a fiscal 2029 EPS target of $15.26.
The new chip, called the Dragonfly C1000, is a central processing unit designed for data centers, with an emphasis on agentic AI workloads and power efficiency. Meta is expected to begin using the chip when it enters production in 2028.
CEO Cristiano Amon told investors the company has "just been executing, collecting assets, and when we got to this point, we feel that we have a comprehensive portfolio to enter the next phase of the data center." He also pushed back on concerns about timing, saying that entry into the data center market should be evaluated on scale, engineering capabilities, and supply chain execution.
CFO Akash Palkhiwala noted that Qualcomm already has relationships with nearly every major hyperscaler through its existing smartphone and edge products. "This is not a new relationship. It's the benefit of what we've delivered to them already on the edge, combined with the scale and the expertise and the confidence in Qualcomm, is what makes them engage with us on data center," Palkhiwala said.
The company also said it had secured two custom silicon deals with hyperscalers and outlined a broader product roadmap that includes an AI chip and a multi-chip interconnect product, reflecting a strategy to address several segments of the data center market simultaneously.
Alongside the hardware announcements, Qualcomm said it is acquiring AI infrastructure startup Modular, whose software enables AI applications to run across a wide range of chip architectures. Qualcomm characterized the acquisition as an equivalent to Nvidia's CUDA software platform. The deal is expected to close in the second half of 2026, and Qualcomm did not disclose the financial terms. Reuters calculations valued the acquisition at $3.92 billion, while earlier reports indicated the two sides had been in advanced talks for a deal valued at nearly $4 billion.
Qualcomm CEO Cristiano Amon said in a statement that the company believes "the future belongs to developer-friendly, horizontal platforms that can run across diverse compute environments and give customers real choice in how and where they deploy AI."
Qualcomm's pivot toward data centers comes as its legacy handset business, which accounted for roughly two-thirds of product revenue in the quarter ended March 2026, faces limited growth prospects. Smartphone shipments peaked in 2017, according to company estimates, and Qualcomm has been seeking to diversify into automotive, robotics, and data infrastructure.
On the automotive side, the company said it expanded its design-win pipeline to $65 billion and raised its automotive revenue target to $10 billion by fiscal 2029.
Industry observers have pointed to growing investor interest in CPUs as AI agents — software systems that operate with limited human supervision — shift more workload away from graphics processing units. Palkhiwala acknowledged the demand dynamic directly, saying "there really isn't enough supply, and multiple players are needed" in the CPU market.
The Modular acquisition and the Dragonfly C1000 launch together signal that Qualcomm is moving from peripheral participant to direct competitor in the data center ecosystem, a market dominated by Nvidia and increasingly contested by a range of established and emerging chip designers.
Sara Montes de Oca is the Editor in Chief of TechEchelon. Previously a correspondent and producer in Washington, D.C., covering business, finance, and politics.
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