Qualcomm CFO talks AI, data centers, and next big bet on robots

In 1985, personal computers began entering American homes, but mobile communications were still a different world. At that time, mobile phones were expensive and bulky, and the idea of everyone carrying one still seemed like a distant future.

That year, 52-year-old Irwin Jacobs decided to start a new company. He and six former colleagues from Linkabit gathered in San Diego and established Qualcomm (QCOM), short for “quality communications.”

The company made a major bet on a technology called Code Division Multiple Access, or CDMA, which allowed users to share limited wireless spectrum. In 1989, Qualcomm made its first CDMA call. Four years later, the technology was standardized as IS-95, setting the foundation for cellular networks.

What Qualcomm did wasn’t just developing technologies. It also found a way to make a profit from it.

The company has built its business around two major segments: QCT, which designs and sells chips, and QTL, which licenses its wireless patents to device makers.

As mobile phones found their way into everyone’s pockets, Qualcomm made money both from the chips that powered them and from the patents used across the industry. This business model helped turn Qualcomm into one of the biggest names in mobile communications.

Now, more than 40 years after its founding, Qualcomm is preparing for another transformation. 

This time, Qualcomm is betting on artificial intelligence, data centers, autonomous vehicles, and robots.

Unlike in 1985, Qualcomm is entering a market already crowded with other big tech names, including Nvidia (NVDA) and Advanced Micro Devices (AMD).

“Jump over to today, think of us as a processing and AI leader for cloud and edge devices,” Qualcomm Chief Financial Officer and Operating Officer Akash Palkhiwala told TheStreet in an exclusive interview at Snapdragon Summit 2026 in Maui, Hawaii.

“We’ve gone from smartphones to other edge devices, and have gone from the edge devices to the cloud.”

Qualcomm wants to move beyond its smartphone roots

For years, Qualcomm’s fortunes have been closely tied to the smartphone market.

Its Snapdragon chips power major Android smartphone manufacturers, while its cellular modems have long been used in Apple’s iPhones. 

At its annual Snapdragon Summit in September, Qualcomm unveiled two new smartphone processors, with Motorola, Xiaomi, and ZTE among the brands planning to use them.

But the smartphone market is no longer delivering the growth it once did.

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In Qualcomm’s fiscal third quarter, reported in July, handset revenue fell 20% from a year earlier to $5.1 billion, partly reflecting weaker demand amid rising memory costs.

Meanwhile, Apple (AAPL), one of Qualcomm’s biggest customers, has been developing its own cellular modems to reduce its reliance on the chipmaker. In Apple’s latest iPhone lineup, only the U.S. version of the iPhone 18 Pro Max uses Qualcomm’s modem, 9 to 5 Mac reported, while the other models use Apple’s own technology.

Qualcomm and Apple renewed their global patent licensing agreement in September, effective April 1, 2027. The agreement preserves their relationship, even as Apple shifts away from Qualcomm’s modem chips.

Still, Palkhiwala doesn’t think Apple’s transition is a big problem for Qualcomm.

“We’re taking advantage of Agentic AI, and to me, Apple [making their own modems] is old news,” he told TheStreet.

Instead, Palkhiwala expects Qualcomm’s revenue to increasingly come from several different markets.

“In the next two years, we’ll become this company with three major businesses: data center, smartphones, and auto IoT… Think of it as three legs of the stool, with each almost equal in size.”

Palkhiwala expects growth in Qualcomm’s new businesses to make up for the loss of Apple’s modem revenue.

“The growth we’ll see in data centers and auto IoT will replace Apple’s [modem revenue] in 2027, in one year.”

The shift reflects a broader strategy outlined by Qualcomm CEO Cristiano Amon, who has stated that the company’s goal is to become a “platform company” and deliver chips to power devices beyond cellphones.

Qualcomm is making a $15 billion bet on AI data centers

Perhaps the most ambitious part of Qualcomm’s transformation is the data centers.

During its June 2026 Investor Day, Qualcomm raised its fiscal 2029 annual non-handset revenue target from $22 billion to $40 billion, with data centers expected to contribute $15 billion. Non-handset refers to Qualcomm’s data center, automotive, and Internet of Things (IoT) segments.

“We were previously not in the data center business, so that drives most of the increase,” Palkhiwala said.

Qualcomm is now facing competition from Nvidia (NVDA), the dominant supplier of AI accelerators, as well as AMD (AMD), Intel (INTC), and cloud giants developing their own chips.

But Palkhiwala believes Qualcomm can bring something different: high computing performance while consuming lower power. Energy efficiency is vital for data centers as AI workloads drive up electricity demand and operating costs.

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“We have the most efficient and high-performance CPU in the industry and will bring that to data centers. That’s something data centers require now because power is a big constraint,” Palkhiwala said.

Qualcomm has also developed a technology called High Bandwidth Compute, or HBC, which stacks memory on top of logic chips to provide greater memory bandwidth.

“We have all three things: high performance, low power, and integration with memory. These are things required in data centers,” he said.

The company has already begun securing major customers.

In September, Qualcomm confirmed a partnership with Amazon (AMZN) to develop custom silicon and infrastructure to support AWS’s AI data centers.

Palkhiwala said Qualcomm is also working with Meta (META), Saudi Arabian AI company HUMAIN, and another undisclosed global hyperscaler. These partnerships could give Qualcomm a foothold in a market where its presence remains small.

“We just started, so [the market share] is small. The goal we’ve laid out is 5% of a trillion-dollar market. Today we are in the $300 million range,” Palkhiwala said. “We expect the market share for data centers to be $50 billion in the next five to seven years.”

More bets in cars and robots

Automotive is already becoming a key source of Qualcomm’s revenue, which jumped 61% year over year to $1.59 billion in its fiscal third quarter.

The company expects annual automotive revenue to reach $10 billion by fiscal 2029. Much of that growth is coming from demand for digital cockpits, connectivity, and advanced driver-assistance systems, particularly in China.

“The automotive business is incredibly strong, especially in China. I think the Chinese ecosystem is changing very, very fast,” Palkhiwala said.

Palkhiwala also believes the technology it develops for cars could eventually power robots.

“Think of robotics as an automotive-like market. Autonomous driving is similar to robotics. From a chip perspective, it’s like a car standing up as a robot,” Palkhiwala said.

Like autonomous vehicles, robots need cameras, sensors, wireless connectivity, and AI processing to understand and interact with their surroundings. And for battery-powered robots, energy efficiency matters just as much as it does for smartphones.

Qualcomm is already working with some robotics companies, including China’s Unitree, as it explores applications in manufacturing, logistics, and transportation.

Palkhiwala added that Qualcomm’s $40 billion non-handset target hasn’t included potential robotics revenue in its expanded 2029 financial target.

“And none of this [Robotics business] has been factored into our expanded targets. We hope to raise the $40B target again. That would be the goal.”

What about the risks?

Rising memory prices have already affected demand for consumer devices, while limited chip manufacturing capacity is adding pressure across the semiconductor industry.

Year to date, Qualcomm stock is up 2.9%, closing at $176.01 on Oct. 8. Wall Street analysts have an average 12-month price target of $197.04, according to TipRanks.

Palkhiwala said Qualcomm would have grown faster without those constraints. He expects the challenges to persist into next year.

“I think it’s safe to say 2027 will continue to be challenging with these industry constraints, but there is hope for 2028 and 2029 for a better balance between demand and supply.”

Palkhiwala also rejected concerns that the AI boom could follow the path of the dot-com bubble of the late 1990s, when enthusiasm for internet companies drove stock prices higher before the market crashed in 2000.

He noted that investors should “zoom out” and look at the longer-term impact of the technology.

“A lot of the technologies that came out of the Dot Com Bubble drove tremendous improvements to our lifestyles, and they drove improvements in profitability for the companies that participated in it, and they are generally very beneficial to society,” he said.

“I think of AI the same way. It doesn’t make sense to zoom in and look at a specific year or a quarter.”

Palkhiwala acknowledged that the industry could face ups and downs, but said he believes AI will become a foundational technology over the next decade.

“We are very early in the AI cycle…. You barely have the full proliferation of AI in consumer devices today,” he said. “We’ve got a long time to go, but the start is very promising, and there is incredible demand for AI.”

(Reporting note: Silin Chen interviewed Qualcomm CFO Akash Palkhiwala at Snapdragon Summit 2026 in Maui, Hawaii, with travel expenses covered by Qualcomm.)

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