Qualcomm (QCOM) Stock Surges 5% on Meta, Microsoft Partnership Reveal

Key Takeaways

• Shares of QCOM climbed 5.3% during early Thursday trading following a premarket spike exceeding 10%
• The semiconductor company elevated its fiscal year 2029 non-handset revenue projection to $40 billion, representing close to double its prior forecast
• Meta Platforms plans to deploy Qualcomm’s Dragonfly C1000 CPUs starting in 2028; Microsoft Azure will implement its HBC chip technology beginning mid-2027
• The company unveiled plans to purchase AI software firm Modular for $3.9 billion
• Wall Street analysts established price targets spanning from $190 (Susquehanna) up to $300 (Benchmark), offering varied recommendations

Shares of Qualcomm experienced substantial gains Thursday as the semiconductor manufacturer disclosed the identities of two major data-center clients — Meta Platforms and Microsoft — while substantially increasing its long-term revenue projections.

QUALCOMM Incorporated, QCOM

QCOM shares advanced 5.3% during Thursday’s early trading session, following a premarket surge that exceeded 10%. The stock had already gained approximately 12% in after-hours activity Tuesday following the company’s Investor Day event.

During the presentation, Qualcomm disclosed that Meta Platforms will integrate its Dragonfly C1000 CPUs upon their 2028 release. Meanwhile, Microsoft’s Azure cloud platform will implement Qualcomm’s High Bandwidth Compute (HBC) chip technology, scheduled for deployment around mid-2027.

Qualcomm Chief Financial Officer Akash Palkhiwala explained to Barron’s that the HBC chip merges logic and memory elements to provide superior performance and bandwidth while maintaining low power consumption.

The semiconductor manufacturer indicated that both hyperscale custom-silicon agreements are projected to generate revenue exceeding $1 billion individually by fiscal year 2027.

Qualcomm increased its fiscal 2029 non-handset revenue projection to $40 billion, a significant jump from the previous $22 billion estimate. Revenue from data-center operations alone is anticipated to reach $15 billion within that timeframe.

Strategic Shift Beyond Mobile Devices

Mobile handsets presently account for 72% of Qualcomm’s fiscal 2025 revenue stream. The organization projects this proportion will decrease to merely one-third by fiscal 2029 as it accelerates expansion into data centers and artificial intelligence markets.

Supporting this strategic transformation, Qualcomm revealed a $3.9 billion acquisition agreement for Modular, an AI infrastructure software provider. Modular has developed an AI programming language designed to compete with Nvidia’s dominant CUDA platform.

Qualcomm additionally announced a broadened collaboration with Hugging Face aimed at advancing AI development throughout data center and AI storage infrastructure.

Wall Street Analyst Perspectives

Benchmark elevated its price objective to $300 from $225, representing the most bullish target among analysts, while maintaining its Buy recommendation. The firm noted Qualcomm had effectively redirected investor attention away from handset-cycle concerns toward edge-to-cloud AI infrastructure opportunities.

Morgan Stanley upgraded QCOM from Underweight to Equalweight, increasing its target to $231, referencing robust fiscal 2027 data-center revenue projections.

Susquehanna increased its target to $190 from $160 while maintaining a Neutral stance, highlighting “headwinds in the mobile market.”

Bank of America elevated its target to $220 from $195 while retaining an Underperform rating. BofA recognized the improved guidance but contended the stock “already embeds meaningful data center success” and identified risks surrounding unproven custom silicon production ramps.

Cantor Fitzgerald similarly increased its target to $220, maintaining a Neutral position.

KeyCorp analyst John Vinh remained at Sector Weight, noting “it’s early days” despite projections surpassing expectations.

BofA additionally highlighted an Apple QTL renewal risk as a potential high-margin concern.

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