Qualcomm's data-center pivot: $5 billion in fiscal 2027, $15 billion by fiscal 2029, SpaceX first
Guidance issued on November 4: more than $650 million of data-center revenue this fiscal quarter, $5 billion by end-2027, and $15 billion, about 30% of the company, by 2029. Alphabet put $548 million behind the pivot; SpaceX, the first named customer, starts building in 2027.
Vincent Jiang · 3 min read
On Wednesday's earnings call, Qualcomm+4.25% — Qualcomm, up 4.25 percent today put a price on its pivot away from smartphones: more than $650 million of data-center revenue in fiscal Q1 2027, $5 billion for fiscal 2027, $15 billion by fiscal 2029, and data-center silicon at about 30% of the company by then 125. Two days later Alphabet+0.90% — Alphabet, up 0.90 percent today, Google's parent, disclosed a $547.9 million stake in Qualcomm, nearly 3 million shares held as of September, and Qualcomm shares rose more than 3% premarket 3.
The buyers behind the ramp are Meta+2.05% — Meta, up 2.05 percent today and Amazon+0.46% — Amazon, up 0.46 percent today in the data center and SpaceX+5.80% — SpaceX, up 5.80 percent today in the field 14.
The ladder management drew: $650 million this quarter, $15 billion by 2029
Each rung must more than double, then triple, while handsets fall below half of revenue
- Data-center revenue
- Estimate
Data
| Data-center revenue | |
|---|---|
| Q1 FY2027 (estimate) | $0.65B |
| FY2027 (estimate) | $5B |
| FY2029 (estimate) | $15B |
The receipts: the phone business is shrinking into the gap
Fiscal 2026 closed at $43.2 billion of non-GAAP revenue, $10.4 billion of it in the fourth quarter 1. Handsets sold $5.1 billion in the quarter and are guided down mid-single digits next quarter on Apple's−0.14% — Apple, down 0.14 percent today modem transition and memory pricing; smartphone sales are down around 20% against 2025, with memory costs driven by AI data centers the stated cause 125.
The handset market is projected to decline low-to-mid teens from 2025 to 2026, and handsets fall below half of Qualcomm's revenue in fiscal 2027 as non-handset revenue grows more than 60% 1. Automotive just posted its first $2 billion quarter, up 89% year over year 1. Inference coverage on November 4 carried the 26% handset decline; what is new since is the priced ladder and the named supplier 1.
The exhibit: a customer whose towers do not exist yet
On November 4 SpaceX named Qualcomm supplier of the Dragonwing QRU100 and QDU100 radio platforms, 64T64R massive MIMO, for Starlink Mobile's planned terrestrial 5G network: tens of thousands of sites from 2027, contract value undisclosed 4. SpaceX has separately agreed to pay about $8 billion for up to 14 MHz of paired 800 MHz spectrum, subject to FCC approval, and Bloomberg reports talks to access at least 80,000 US cell sites 4. Tower owners moved on the spectrum news: Crown Castle−0.93% — Crown Castle, down 0.93 percent today up 13.4%, American Tower−0.40% — American Tower, down 0.40 percent today 8.2%, SBA 6.7% 4.
Tower owners priced in a SpaceX build the same week
Data
| Value | |
|---|---|
| Crown Castle | 13.4% |
| American Tower | 8.2% |
| SBA Communications | 6.7% |
The skeptics' case, and the company's answer
T-Mobile's CTO John Saw counts SpaceX's prospective spectrum at roughly 80 MHz, some of it uplink-only, against nearly 400 MHz of low- and mid-band spectrum at T-Mobile−0.11% — T-Mobile, down 0.11 percent today 4. Ookla's RootMetrics testing found roughly one in seven Starlink direct-to-device texts failed against about one in fifty on terrestrial networks 4.
Custom silicon dilutes gross margins, and QCT's guided 20% to 22% segment margin for fiscal Q1 includes a 3-point hit from data-center investment ahead of revenue 1. The company's answer: two customers at significant scale carry the $5 billion, a third is in advanced discussions, and CFO Akash Palkhiwala said supply, not demand, would constrain upside, with a $7 billion exit run rate into fiscal 2028 1.
Verdict watch
FCC approval of the Grain spectrum purchase comes first; SpaceX targets 2027 for both its next-generation satellites and the ground build 4. The fiscal second-quarter print in late April tests the ramp itself: price increases restore gross margin from that quarter, and the $7 billion exit rate is the rung under the $15 billion 1. The ladder is priced; the rungs are still unbuilt.
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