Qualcomm Targets AI Data Center Market With New Dragonfly CPU

Qualcomm is shifting its focus beyond mobile hardware, announcing a major push into the AI data center market during its Investor Day on June 24, 2026. The company aims to capture a share of a CPU market it projects will reach approximately $200 billion by fiscal 2029 or 2030.

The core of this strategy is the Dragonfly C1000, a server CPU designed for agentic AI workloads. The chip utilizes a multi-chiplet design, featuring over 250 Oryon cores and operating at frequencies above 5 GHz. Qualcomm claims the hardware delivers more than double the performance per watt compared to competing server CPUs, a metric the company highlights as critical for data centers facing electricity constraints.

Meta Platforms has already signed a multi-generation agreement to integrate the Dragonfly C1000 into its servers, with volume production scheduled for the second half of 2028. Additionally, Microsoft is expected to deploy Qualcomm’s High Bandwidth Compute chips, and the company anticipates further revenue from unnamed hyperscalers before the end of 2026.

Qualcomm has set a target of more than $15 billion in data center revenue by fiscal 2029, with a $5 billion milestone projected for fiscal 2027. These goals are part of a broader effort to diversify revenue, as the company expects smartphones to account for only one-third of its total income by fiscal 2029. Consequently, Qualcomm has nearly doubled its non-handset revenue target for fiscal 2029 to $40 billion.

The market responded positively to the announcement, with Qualcomm shares rising more than 12% in after-hours trading. While the server CPU market remains competitive with established players like Intel, AMD, and Nvidia, Qualcomm is positioning its Arm-based designs as a more efficient and cost-effective alternative for power-constrained environments.

Investors will likely look to the fiscal 2027 revenue projections as an early indicator of whether the company can meet its longer-term targets as it enters a space dominated by traditional x86 processors.