Qualcomm Plots Entry in Data Center Market, Working With Hyperscaler — Update

By Kelly Cloonan

Qualcomm is entering the lucrative data center market, with the semiconductor company working with a leading hyperscaler to provide custom silicon.

The San Diego, Calif. company on Wednesday disclosed the expansion as it reported higher revenue in its latest quarter, which was boosted by growth in its automotive and internet of things segments.

Qualcomm expects initial shipments for the hyperscaler customer to begin in the December quarter, Chief Executive Cristiano Amon said during a call with analysts. The company has noted previously that it's been engaging with a number of companies as it works to provide custom chips.

"Given the capabilities that we're developing and what's happening in the market, that's accelerating," Amon said.

Amon gave sparse details about the hyperscaler customer, but said Qualcomm is eyeing a long-term relationship.

"We're very excited," he said. "We're really thinking about a multi-generation engagement. But I think that's what we can say at this point," he said, noting Qualcomm plans to share more about its data center growth plans at its upcoming investor day in June.

The stock climbed 17% to $182.68 in after-hours trading, even as its outlook for the current quarter came in below Wall Street's expectations. Through the market close, shares are down 8.8% year to date.

For the fiscal second-quarter, profit came in at $7.37 billion, or $6.88 a share, compared with $2.81 billion, or $2.52 a share, a year earlier. The recent quarter's figure includes a $5.7 billion income tax benefit, or $5.33 per share, from the release of a valuation allowance, the company said.

Adjusted earnings per share were $2.65, compared with estimates of $2.56 a share according to analysts polled by FactSet.

Revenue rose 3% to $10.6 billion, compared with analyst estimates of $10.59 billion.

The growth was driven by higher sales in the company's automotive and internet of things segments. However, sales in the company's handset segment fell 13%.

For the current quarter, the company expects earnings per share of $1.26 to $1.46, adjusted earnings per share of $2.10 to $2.30 and revenue of $9.2 billion to $10 billion. Analysts expect earnings per share of $1.91, adjusted earnings of $2.42 per share on revenue of $10.19 billion, according to FactSet.

Write to Kelly Cloonan at kelly.cloonan@wsj.com

(END) Dow Jones Newswires

April 29, 2026 18:23 ET (22:23 GMT)