Goldman Sachs upgraded Qualcomm to outperform on datacenter ASIC ambitions, validating non-Nvidia AI chip strategy.

Goldman Sachs raised its 12-month price target on Qualcomm to $180 from $145 following the chipmaker's announcement of a $15 billion data center revenue goal. The bank kept its rating at Neutral, however, indicating that a bullish estimate revision does not equate to a buy recommendation. Notably, Qualcomm shares have already surpassed Goldman's new target.

The new price target applies a 15 times price-to-earnings multiple, up from 12 times, to a normalized earnings estimate of $12 a share, up from $11. Goldman raised its overall estimates for the company by an average of 10% following Qualcomm's Investor Day, held in New York on June 24.

At that event, Qualcomm unveiled its case for higher numbers, nearly doubling its long-term non-handset revenue target for fiscal 2029 to $40 billion. Roughly $15 billion of that figure is expected to come from data centers alone. Goldman now models $5 billion in Qualcomm datacenter revenue for fiscal 2027, rising to $8.2 billion by fiscal 2028—early steps toward the company's 2029 target.

The credibility behind these projections rests on commitments from two major customers. Meta Platforms has committed to deploying Qualcomm's new Dragonfly C1000 server processor once it enters production in 2028. Microsoft's Azure unit has separately signed on for a Qualcomm chip designed to ease AI memory bottlenecks, due in mid-2027. Both companies rank among the Magnificent Seven, whose enterprise spending increasingly sets the pace for the entire chip sector.

Qualcomm's strategy addresses a fundamental business challenge: handsets, which made up 72% of chip revenue in fiscal 2025, are expected to fall to roughly a third of the total by fiscal 2029. Goldman has trimmed handset revenue estimates even as it raised automotive and IoT numbers, in line with the company's own guidance.

Goldman expects Qualcomm's fiscal third quarter results to be in line with consensus, with modest upside driven by better-than-expected margins. Its fiscal fourth-quarter earnings estimate sits 3% above Wall Street consensus, and its fiscal 2027 earnings forecast of $12.40 a share is 15% above the Street.

Qualcomm shares closed at $182.97 on July 8, already above Goldman's freshly raised $180 target. The stock is up more than 16% year to date and jumped as much as 15% in after-hours trading the night of the Investor Day before settling into a choppier pattern in the weeks since. On July 6, shares climbed nearly 6% after Benchmark reaffirmed a Street-high $300 target, but subsequently declined when Elon Musk denied a report linking SpaceX to a Qualcomm-powered device.

Citi has kept a Neutral rating on the stock while opening a 30-day downside watch, capturing how unresolved the datacenter story remains. Morgan Stanley and JPMorgan also raised their price targets after the Investor Day, putting Goldman's Neutral stance in the minority among analysts who moved their numbers higher but stopped short of a Buy rating.

Qualcomm's pivot reflects a wider scramble among chipmakers built on mature markets—phones, PCs, networking gear—to find growth in the data center buildout reshaping the industry. Intel, Marvell, and Arm have made similar bets with mixed results so far.

Qualcomm's fiscal third-quarter earnings report, due in early August, will serve as the first real checkpoint for whether the company's data center pipeline is converting into actual shipments, or whether the Investor Day optimism proved to be simply the easiest part of the story to tell.