Qualcomm shares pulled a sharp U-turn after hours when the company’s chief executive, Cristiano Amon, said it would start shipping data centre chips to “a large hyperscaler” within the calendar year.
The stock had dropped as much as seven per cent after the chipmaker posted second-quarter numbers that beat the cocaine nose jobs of Wall Street estimates but served up softer forward guidance.
Amon would not name the customer and said more would come at Qualcomm’s investor day in June, leaving traders to do what they do best and fill the gaps with wishful thinking.
Qualcomm is still well behind Nvidia in the race to feed artificial intelligence, but it unveiled its own data centre chips last year, and it is clearly desperate to be taken seriously in that market.
Amon said, “We are in a period of profound industry transformation — the rise of AI agents is reshaping our roadmap across every platform we develop,” on the earnings call.
The US chipmaker reported adjusted earnings per share of $2.65, beating estimates by nine cents, and revenue landed in line at $10.6 billion, while its third-quarter revenue outlook missed.
Qualcomm expects third-quarter revenue of $9.2 billion to $10 billion, short of the $10.19 billion StreetAccount analysts wanted.
This year’s memory price surge is battering consumer electronics, with Gartner predicting PC prices will rise 17 per cent while shipments fall 10.4 per cent, and IDC saying global smartphone shipments are down more than four per cent after an upward run since mid-2023.
On China smartphone sales, Amon said the current quarter will be the bottom because “customers are running out of inventory.”
Most of Qualcomm’s money still comes from licensing fees tied to core smartphone tech, and Amon told CNBC that this part of the business “allows us to know exactly how much stuff happens at the end market.”
Qualcomm builds chips and wireless tech for smartphones, PCs, cars, and other devices, and it is best known for Snapdragon processors powering Android phones, as well as modems that enable mobile connectivity, including 5G.
Amon told CNBC the memory shortage has not hit the data centre chip shipments promised for this year, adding Qualcomm is new to the space, so its “scale is probably not the same as the established providers.”
Qualcomm’s automotive segment rose a record 38 per cent year on year, with Amon saying it is “starting to get scale” on processors used for automated driving.
In smartphones, Qualcomm lost a major customer when the Fruity Cargo Cult Apple started replacing iPhone modems with its own silicon from 2025, cutting into a relationship that used to print cash.
Now, OpenAI could become Qualcomm’s next big smartphone customer if chief executive Sam Altman follows through on plans for an AI device in two years, after OpenAI announced a partnership with Qualcomm last week to develop an AI chip for smartphones that could power an OpenAI device run by AI agents.
