Qualcomm used its annual Investor Day event in New York to unveil a sweeping strategic pivot toward artificial intelligence data centers, nearly doubling its fiscal 2029 non-handset revenue target to $40 billion from a prior projection of $22 billion and announcing Meta Platforms as its first data center customer for a new chip purpose-built for agentic AI workloads. The announcements, made after Wednesday's close, sent shares jumping 15% in after-hours trading before settling to a gain of approximately 9% in Thursday's regular session, adding roughly $25 billion in market capitalization on the day.
The centerpiece of the Investor Day was the Dragonfly C1000, Qualcomm's first data center central processing unit, designed for AI inference workloads with a power-efficiency profile management described as superior to competing architectures. Meta CEO Mark Zuckerberg appeared at the event in person to confirm that Meta would deploy the Dragonfly C1000 in its next-generation server fleet, with production expected to begin in the second half of 2028. Zuckerberg said the partnership will 'help put personal superintelligence into billions of people's hands' and that 'there is a lot more to come.' Microsoft CEO Satya Nadella separately confirmed that Azure would deploy Qualcomm's High-Bandwidth Compute technology, giving the chipmaker two major hyperscale customer endorsements on the same evening.
Qualcomm simultaneously announced the acquisition of Modular, an AI software infrastructure startup, through an all-stock transaction valued at approximately $3.92 billion. Modular's technology enables AI models to run across heterogeneous chip architectures from multiple vendors without requiring vendor-specific programming, positioning the combined company as a direct challenger to Nvidia's dominant CUDA ecosystem. CEO Cristiano Amon described the deal as critical to building an open software stack that would allow customers to run AI workloads on Qualcomm silicon without re-engineering existing codebases.
The updated fiscal 2029 revenue targets segment as follows: data center above $15 billion, IoT above $14 billion, automotive at $10 billion, and personal AI and compute at $6 billion. Under that scenario, handsets would account for roughly one-third of total chip revenue by 2029, down from approximately two-thirds today. The company also raised its fiscal 2029 adjusted EPS target to above $18, compared with the current Wall Street consensus of $15.26 for that year. Qualcomm's automotive design-win pipeline grew to $65 billion, and the segment is on track to exit fiscal 2026 at a $6 billion annualized revenue run rate.
Seven analysts raised price targets on Qualcomm following the Investor Day, though most maintained cautious ratings pending execution evidence on the data center opportunity. Barclays maintained an Underweight rating, characterizing the data center business as a 'show-me story' given that Dragonfly production does not begin until 2028, leaving a multi-year gap between the announcement and verifiable revenue. The critical near-term test for Qualcomm's re-rating will be whether Meta and Azure relationships translate into contracted volume commitments comparable to the take-or-pay agreements Micron revealed in its earnings call on the same evening.