Chief Financial Officer & Chief Operating Officer, Qualcomm Inc
Qualcomm (QCOM) CFO & COO on AI Data Center Push, META & MSFT New Customers
Akash Palkhiwala, CFO and COO of Qualcomm (QCOM), talks about how the company's AI data center pivot serves as a key inflection point. Qualcomm named Meta Platforms (META) and Microsoft (MSFT) as early customers in the AI infrastructure buildout. Akash believes the company is primed to take significant market share in what he calls a "trillion-dollar market." He adds how Qualcomm's deeper push into the AI buildout affects its legacy businesses like devices and automotive.
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About Akash Palkhiwala
Akash Palkhiwala, Qualcomm’s CFO and COO, participated in the company’s Investor Day on June 24, 2026, where Qualcomm announced a revised fiscal 2029 revenue target of $40 billion, nearly double the $22 billion target set 18 months earlier. Palkhiwala described the company’s AI data center push as a key inflection point, naming Meta Platforms and Microsoft as early customers. He stated that Qualcomm is targeting $15 billion in data center revenue by fiscal 2029, calling the overall market a “trillion-dollar market” and saying a roughly 5% share is “very reasonable.” He also said Qualcomm is bringing its low-power processing technology from edge devices to data centers, describing data centers as “token factories” where the company’s accelerator delivers tokens at the lowest power. On the company’s Q2 fiscal 2026 earnings call in April, Palkhiwala reported revenues of $10.6 billion and non-GAAP EPS of $2.65, with $3.7 billion returned to stockholders. He noted that QCT handset revenues from Chinese customers had been impacted by memory supply constraints driven by AI data center demand, and forecast that those revenues would bottom in the third quarter before returning to sequential growth. He also said Qualcomm expects initial shipments for a custom silicon engagement at a leading hyperscaler later in calendar 2026. In a May interview in India, Palkhiwala discussed Qualcomm’s involvement in semiconductor design and said the company expects to become one of the largest customers for India’s manufacturing ecosystem.
Transcript (17 segments)
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Host0:06
Welcome back to Opening Bell. We want to get you ready for the trading day. We have a big, very special guest with us right now: Akash Palkhiwala. Thank you so much for being with us, Akash. You're the Chief Operating Officer and Chief Financial Officer at Qualcomm. We're so glad you're with us. So, you had your investor day, and people are really cheering. Qualcomm's transformation and the AI build-out is real. Tell us a little bit about what's on the agenda here.
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Akash Palkhiwala0:36
Yeah, Nicole, first of all, thanks for having me on the show. I'm very excited about what we announced yesterday. I think Qualcomm has been the leader on edge devices with smartphones, cars, industrial, and other areas. Now we're bringing those technologies to data centers. As data centers evolve, what becomes very important is being able to do processing in data centers at very low power. That's something we've been doing for a long time in edge devices, and we're bringing that advantage to the data center. So, very positive reception from customers. I think the hyperscalers are looking for alternatives, and as we move from training to inference, and as data center processing changes from using GPUs for everything to disaggregated computing, there's a lot more room for other players to come in and give solutions optimized for low-power workloads. So, very excited about what we announced yesterday. I think it's just the beginning for Qualcomm and data centers.
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Host1:40
Yeah, you've been quietly calibrating your CPUs for this, and now with data centers, it's somewhat monumental to folks because we're going to talk about non-handset revenue there. So, really big projections going forward. You know, on the numbers overall, the CEO also noting how confident you are in the forecast. I mean, by 2029, we talk about $40 billion. Tell me a little bit about some of the forecasts on that, and so much of it, $15 billion from the data center business alone that you're speaking of.
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Akash Palkhiwala2:16
Yeah, it's pretty incredible. I think we had a target of 2029 revenue for non-handset of $22 billion. We are revising that target from $22 billion to $40 billion, so that's nearly a two-X increase in a revenue target two years out. And so, very excited. Data center is a big part of it. We are now looking at $15 billion of revenue in 2029, and $5 billion of revenue next year. And really, this is a very large market. It's a $1 trillion market. And for Qualcomm to have a target of, say, approximately 5% share of that market is very reasonable. And so, I think it's just the beginning. We start in 2027 with custom chip engagements with two global hyperscalers, but that's the start. And we're going to engage with other hyperscalers and have a very broad product line. So, super excited about what we're going to do with it.
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Host3:15
I mean, there's been speculation about some of the other names. We know Meta and Microsoft are some early customers. Tell us about those relationships and what the expectations are and the agenda for you to provide to them.
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Akash Palkhiwala3:27
Yeah, we've been working with these customers for a very long period of time, right? Meta, as an example, their Ray-Ban Meta glasses use a Qualcomm chip in them. Microsoft Surface PCs use a Qualcomm chip in them. You think about Google and Amazon; they all use our chips on the edge devices. So, these are companies that we're very familiar with. We've been discussing how our technology can become relevant to their data center needs. And this is a lot of things coming together, right? We've been working on it for a while, and now you're seeing their needs align with what Qualcomm can deliver. And hence, the big change.
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Host4:05
And Dragonfly, the brand name now that you're using to differentiate from your edge-centric Snapdragon, tell me a little bit about that and where it plays a role.
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Akash Palkhiwala4:15
Yeah, Dragonfly is really the global brand for everything data center, right? So we're doing custom chips for customers. We are building really the fastest CPU; we think it's going to be two-X better than anything that's on the market today. We are also building an AI accelerator with this unique technology called HBM, high-bandwidth compute, that's going to deliver very high bandwidth at very low power. And then we're also building connectivity chips. And all of these four families of products will be under the Dragonfly name.
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Host4:48
You know, still very big in automotive. That has always been a bread and butter point for the company, but also expanding into so many other areas: industrial, networking, robotics, Internet of Things, personal AI, and compute. Tell me a little bit about the expansion plans. Where do you expect to see that growth?
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Akash Palkhiwala5:06
And physical AI is something we're incredibly excited about. And physical AI, of course, starts with automotive, where we are the leader. We think we're going to be next year the largest supplier to the automotive industry from a silicon perspective. That naturally extends into industrial use cases and then into robotics. So, we're super excited about what comes with these transformations. Robotics is an area that we think is going to be the next trillion-dollar market, and Qualcomm has all the right chips, all the right software technologies that will come together into this area. So, very excited about that. The second area I would highlight is personal AI, and think of this as smart glasses, smart watches, wearable devices. These are devices that can see what you can see, that can hear what you can hear, and you can have an agentic AI conversation with them. So, a new category of personal devices that I think everyone globally is going to carry one or two of these devices in addition to phone and PC. And Qualcomm is by far the platform of choice globally for people picking what chip to use when they make these devices. Meta is an example, but you could think of Google and Snap and Chinese customers, Indian customers. This is a global trend, and Qualcomm is at the forefront of it.
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Host6:32
Yeah, and so we're going to be carrying more devices, is what you're telling me. You know, I think it's also interesting that there's real opportunity for you in decode acceleration across merchant and custom silicon as we think about how you can grow and how you can compete, providing the CPUs and the needed energy, I guess, at a lower pace and a better way. You have your MICS set up. Tell me more about the outlook there when it comes to the decode, the AI inference, because that seems to be really the very exciting part of this.
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Akash Palkhiwala7:07
Yeah, you know, data centers are becoming token factories. It's all about delivering tokens at the lowest cost, at the lowest power. And so, what we're building, the accelerator that we're building delivers tokens at the lowest power. And that translates into a direct total cost of ownership advantage for the hyperscalers, as you know. Well, like when people build data centers today, one of the problem statements you have to solve is availability of power, and there's not enough power for what is needed. And in that case, it becomes important that the hyperscalers pick chips and pick solutions that are extremely low power so that they can minimize what is needed when they build these new data centers. And what our solution delivers is this token factory for data centers at the lowest possible power. And that's why there's so much interest in it.
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Host8:03
You've also had the MOLINAR acquisition that you announced June 24th and open software stack. We think about the other companies that you may be working with, names like Amazon, ByteDance have been thrown around. And so, when we think about where Qualcomm is going, I mean, you've really had a transformation, and this is the moment. How do you remain competitive here?
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Akash Palkhiwala8:29
Yeah, you know, Qualcomm has always been known for technology leadership, and we've led in delivering the strongest performance in edge devices for years. And now we're bringing that to data centers. So, very excited. I think MOLINAR is a big piece of the puzzle going forward. The data center customers and edge devices are looking for an AI-native software stack where you can port AI models and port use cases very quickly, and then you can use it across cloud and across edge devices. And so, MOLINAR is an industry standard. It's an open-source platform that can be deployed not just on Qualcomm chips, but on our competitor chips as well. And that's what the need of the day is: that you need a solution that can be deployed across the disaggregated serving that we're going to see in data centers and the devices that we're going to see. So, we will leave it as a separate entity. It will continue to support all chips in the industry. It will be an open-source platform. It'll be optimized for everything we deliver as well.
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Host9:40
Okay, and so I like, you know, you're saying it's not only for the Qualcomm chips, but it's also across the board. And that will be obviously a point to make as well. Let's just quickly talk about the revenue outlook, which now you've doubled and wowed Wall Street with that. The concerns for as you build out on AI demand, supply, demand change. Tell me about that. What are your expectations for that?
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Akash Palkhiwala10:07
Yeah, I think the demand is extremely strong. The demand is extremely strong. You should think of Qualcomm as a very large supply chain scale company, right? We ship about 40 billion components a year. We use a lot of wafers in leading nodes across different foundries. We have a strong relationship with various suppliers as well. So, because of the scale that we have, this is something that becomes very important to customers today when they're looking for a supplier. They want someone who they can rely on, who will be able to supply their needs. And the fact that we have such a good track record, the fact that we have such great scale in supply chain becomes an important factor for our customers as they make decisions.
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Host10:56
All right. Akash Palkhiwala, thank you so much. Chief Financial Officer, Chief Operating Officer at Qualcomm. It was wonderful to speak with you today. I'm so glad we got.