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▲ Qualcomm (QCOM), Artificial Intelligence (AI), Semiconductor, Data Center/AI Generated Image
Qualcomm's (QCOM) aggressive push into the data center market within the AI semiconductor sector is intensifying. Qualcomm has secured contracts with three hyperscalers. Its data center revenue target for 2029 is $15 billion.
According to Nasdaq on July 5 (local time), Qualcomm is rapidly expanding its data center semiconductor business, which was virtually negligible last year. The company announced in April that it is developing custom silicon solutions with major hyperscalers. The business expansion is expected to fully commence by the end of this year.
Qualcomm executives stated at last month's Investor Day event that they had secured two hyperscalers with contracts worth at least $1 billion. They also signed a contract with Meta Platforms (META). Qualcomm plans to supply next-generation central processing units for AI agents to Meta starting in the second half of 2028.
Qualcomm plans to increase data center revenue to $5 billion by fiscal year 2027. The target for 2029 is $15 billion. Intel's (Intel, INTC) data center and AI division recorded $5.1 billion in revenue last quarter. Its revenue for the past year was $17 billion.
Qualcomm anticipates the market size for connected semiconductors, custom silicon, AI accelerators, and central processing units to exceed $1 trillion. The 2029 data center revenue target of $15 billion represents approximately 1.5% of that market. Competitors include Nvidia (NVIDIA, NVDA) and Intel.
Qualcomm executives projected earnings per share (EPS) to exceed $18 in 2029. Based on this year's estimates, the compound annual growth rate is 18%. Qualcomm stock is trading at less than 18 times its forward earnings estimates, and the author of the article assessed the buying opportunity as still attractive.
[Key Article Summary]
-Qualcomm has secured contracts with three hyperscalers and is expanding its data center semiconductor business.
-Data center revenue targets are $5 billion for fiscal year 2027 and $15 billion for 2029.
-Qualcomm projects EPS of over $18 in 2029, with a forward P/E ratio of less than 18x.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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