Qualcomm data center chip orders

What happened: Qualcomm announced the Dragonfly C1000, its first AI-focused data center CPU, with Meta as its initial customer, set to deploy it in 2028. The company also acquired AI startup Modular to bolster its software stack for data centers. Despite missing guidance, Qualcomm's stock surged on these data center developments and optimism about its smartphone business recovery. CEO Cristiano Amon revealed that Qualcomm would start shipping data center chips to a large hyperscaler this year.

Market impact: The data center sector is poised for growth as Qualcomm, a major player in mobile chips, enters the market. This could intensify competition among data center chip providers like AMD and Intel. Meta's commitment to Qualcomm's chip signals a potential shift in data center supply chains. The stock market responded positively to Qualcomm's data center push, with QCOM shares surging 15% in extended trading.

What to watch next: Investors should monitor Qualcomm's Q3 results (expected in late July) for further insights into its data center business. Additionally, the first data center chip shipments to the large hyperscaler, expected this year, will be a crucial milestone to watch. Lastly, any updates on Qualcomm's smartphone business recovery, given its significant impact on the company's overall performance.