Qualcomm shares made a dramatic reversal after the bell on Wednesday, as CEO Cristiano Amon said on an earnings call that the company would begin shipping data center chips to “major hyperscalers” within the calendar year.
Shares initially fell as much as 7% after the company announced second-quarter profits beat Wall Street expectations but fell short of future expectations.
Amon declined to identify the customers, but said details would be released during Qualcomm’s investor day in June.
Although it is far behind giants such as Nvidia In the race for chips to power artificial intelligence, Qualcomm unveiled its own data center chip last year. OpenAI also announced last week a partnership with Qualcomm to develop AI chips for smartphones that can power future OpenAI devices run by AI agents.
“We are in a period of significant industry transformation. The rise of AI agents is reshaping our roadmap across every platform we develop,” Amon said on the earnings call.
The U.S. chipmaker reported adjusted earnings per share of $2.65, beating expectations by 9 cents. Revenue was $10.6 billion, in line with expectations, but third-quarter revenue expectations were lower than expected.
Qualcomm expects third-quarter revenue to be in the range of $9.2 billion to $10 billion, short of the $10.19 billion that StreetAccount analysts had expected.
This year has brought about soaring memory prices, hurting Qualcomm’s consumer electronics end market. Gartner predicts that PC prices will rise 17% this year and unit shipments will decline 10.4%. According to International Data Corporation, global smartphone shipments are down more than 4%, breaking the upward trend that had been in place since mid-2023.
Regarding smartphone sales in China, Amon said on a call with CNBC that this quarter will be the bottom due to “customer inventory shortages.”
Much of Qualcomm’s revenue comes from licensing fees it charges for the core technology used within nearly all smartphones. Amon told CNBC that this part of his company’s business “allows us to see exactly how much is going on in the end market.”
Qualcomm designs chips and wireless technology for smartphones, computers, cars and other devices. It is best known for its Snapdragon processors, which power Android smartphones and the modem technology that enables mobile connectivity such as 5G.
Amon told CNBC that the memory shortage won’t affect data center chip shipments this year, adding that Qualcomm is new to the space and its “scale is probably not the same as existing providers.”
Qualcomm’s automotive division posted a record 38% year-over-year increase, with Amon saying the company is “starting to scale up” the processors that power self-driving cars.
In smartphones, Qualcomm lost a major customer. apple started replacing iPhone modems with its own chips in 2025.
Now, OpenAI could become Qualcomm’s next major smartphone customer if CEO Sam Altman can achieve his plan to develop an AI device within two years.
“Expect us to be working not just with them, but with most AI companies today,” Amon told CNBC. “So the design effort is very strong.”
CNBC’s Kristina Partinevelos contributed to this report.
