October 27, 2025 – Global Stocks News – Qualcomm (NASDAQ: QCOM) shares surged more than 20% on Monday after the chipmaker announced its most ambitious expansion in years — a decisive move into the artificial intelligence (AI) data center market. The initiative signals a major shift in the company’s long-term growth strategy as it seeks to diversify beyond smartphones and establish itself as a serious player in enterprise computing.
The California-based semiconductor giant revealed two new data center products — the AI200 and AI250 accelerators — along with a suite of rack-scale servers designed to run advanced AI inference workloads. Qualcomm said the AI200 platform will launch in 2026, followed by the more powerful AI250 in 2027, with a third generation planned for 2028. This rollout marks the beginning of what the company describes as a yearly cadence of AI system upgrades, positioning it alongside industry leaders such as Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD), which dominate the AI infrastructure market today.
At the core of these systems is Qualcomm’s custom Hexagon Neural Processing Unit (NPU), a technology that has powered the company’s mobile and PC processors for years. The firm is now scaling that design to meet the demands of high-performance data centers. The Hexagon NPU will be central to the new chips’ efficiency and processing power, supporting AI inference — the phase of AI operations where trained models are deployed to generate real-time results. This sets Qualcomm apart from companies that focus primarily on AI model training, a process requiring vastly different architecture and power usage.
Qualcomm’s pitch to cloud and enterprise customers hinges heavily on energy efficiency and total cost of ownership (TCO). The company believes its chips can significantly reduce electricity and cooling expenses for data centers — an increasingly important factor as hyperscale operators face soaring power costs and environmental pressures. Data centers are notorious for their massive energy consumption, and as AI workloads grow, that problem has only intensified. Qualcomm aims to attract customers seeking to balance performance with cost and sustainability.
The AI250, scheduled for release in 2027, will feature ten times the memory bandwidth of the AI200, offering higher throughput and faster model response times for applications like real-time translation, autonomous systems, and intelligent cloud services. By designing these accelerators specifically for inference rather than training, Qualcomm is targeting a segment of the AI market that is poised to scale rapidly as adoption spreads across various industries, including healthcare, finance, retail, and automotive.
Crucially, the company isn’t locking buyers into full server purchases. According to Qualcomm executives, customers will be able to mix and match components — purchasing the AI accelerators on their own, integrating them into existing server infrastructures, or opting for complete Qualcomm-built rack systems. This modular approach gives the company an advantage in attracting partners who may already have substantial investments in competing architectures.
In a twist of industry dynamics, Qualcomm suggested that even its competitors, Nvidia and AMD, could eventually become customers, depending on their own system configurations. That kind of hybrid ecosystem underscores the growing interdependence among chipmakers as AI workloads become more complex and specialized.
While this announcement marks a new chapter for Qualcomm, it’s not the company’s first attempt to break into the data center business. In 2017, it launched the Centriq 2400 processor in collaboration with Microsoft (NASDAQ: MSFT), touting it as an energy-efficient alternative to Intel’s (NASDAQ: INTC) Xeon chips. Despite initial promise, the effort was short-lived, largely due to intense competition from established players and internal distractions, including a wave of legal disputes and restructuring. The project was shelved in 2018, and Qualcomm shifted its focus back to mobile processors and modems.
This time, the environment looks different. The AI hardware market is booming, driven by explosive demand from cloud providers, corporations, and startups racing to deploy generative AI tools. Market analysts estimate that the AI chip sector could surpass $400 billion by 2030, with data centers representing a large portion of that growth. Nvidia currently commands the lion’s share of the segment, while AMD has gained traction through its MI300 series accelerators. Qualcomm’s entrance adds a new competitive dimension, particularly in inference-focused systems where efficiency and price are key.
Despite this potential, Qualcomm faces significant headwinds. Tech giants like Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOGL), and Microsoft have been developing their own AI chips to power proprietary cloud services, reducing their dependence on third-party suppliers. To carve out meaningful market share, Qualcomm will need to demonstrate not only performance parity but also operational advantages — namely, lower costs, easier scalability, and strong software integration.
The company’s broader strategic objective is clear: to reduce its reliance on smartphones, which still account for the majority of its revenue. In its fiscal third quarter, Qualcomm reported $10.4 billion in total sales, with approximately $6.3 billion coming from its handset business. The data center segment is currently unreported, underscoring how early this initiative is in Qualcomm’s financial roadmap. Success in this space could significantly rebalance its revenue mix over the next five years.
Industry observers note that Qualcomm’s new data center ambitions align with a wider transformation happening across the semiconductor sector. AI has become the defining growth driver, and traditional chip companies are rushing to reposition themselves as leaders in the next era of computing. Qualcomm’s expertise in low-power chip design, developed through decades in mobile technology, could serve as a competitive advantage if it can scale that efficiency to enterprise-grade performance.
At 1:48 PM EDT, Qualcomm shares traded at $189.43, up 12.14% on the session, extending a rally that reflects growing investor optimism about the company’s diversification strategy. The market’s reaction suggests confidence that Qualcomm’s renewed focus on AI infrastructure could open a new growth chapter after years of being defined primarily by the smartphone market.
Whether the company can sustain that momentum depends on its execution — and on convincing cloud operators and enterprises that a third major player in the AI data center race is not only viable but also essential. For now, Qualcomm’s message to the market is clear: the AI hardware revolution is far from over, and it intends to be at the center of it.