• Qualcomm (NasdaqGS:QCOM) reported record automotive revenue in Q2 2026 and indicated this business is on track to exceed $6b in fiscal 2026.
• The company disclosed plans to begin shipping custom silicon later this year for a leading hyperscaler data center client, targeting AI workloads.
• Reports also point to a deeper Qualcomm and OpenAI collaboration on AI focused smartphone chips for a device expected in 2028.

For investors who mostly associate Qualcomm with smartphone modems and application processors, these updates highlight how much broader the story has become. Automotive, data centers and AI centric devices now sit alongside handsets as concrete product areas that can matter to future results. Each of these end markets has different demand drivers, which can change how you think about risk and revenue mix for NasdaqGS:QCOM.

Looking ahead, these new chip programs give you more specific touchpoints to watch rather than relying only on general diversification themes. Key questions include execution on automotive design wins, how quickly the hyperscaler ramps its custom silicon and whether AI native phones tied to OpenAI gain traction closer to 2028. How those pieces develop will shape how durable these newer revenue streams become over time.

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For you as an investor, the key takeaway from this update is how Qualcomm is trying to rebalance its business mix. Record automotive revenue and an expectation of more than US$6b in automotive sales by fiscal 2026 give the company a clearer second leg alongside handsets. The new custom chip for a major cloud provider puts Qualcomm in the same conversation as Nvidia, AMD and Intel in AI data-center spending, although Qualcomm is entering an arena where those rivals are already well established. The reported OpenAI smartphone work is further out, but it ties Qualcomm directly to AI-first device ideas that could matter for the next upgrade cycle.

How This Fits Into The QUALCOMM Narrative

• The Q2 data-center engagement and record automotive revenue align with the view that AI devices, automotive and industrial IoT can gradually reduce reliance on handset-driven earnings.
• At the same time, the earnings data for Q2 2026, with revenue of US$10.6b versus US$11.0b a year earlier, underline that diversification is still early and does not fully offset handset and memory-related pressure yet.
• The potential OpenAI phone project, with production targeted for 2028, sits beyond the explicit time frame of the current narrative and may not yet be fully reflected in long-term story assumptions.

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The Risks and Rewards Investors Should Consider

• ⚠️ Dependence on a cyclical handset market and memory supply constraints can still weigh on Qualcomm, as reflected in Q2 2026 revenue of US$10.6b compared with US$11.0b a year earlier.
• ⚠️ The new data-center ASIC and OpenAI smartphone collaboration face execution and timing risk, especially in markets where competitors such as Nvidia and AMD already have deep customer relationships.
• 🎁 Record automotive revenue and guidance that this segment could exceed US$6b in fiscal 2026 point to a growing business that is less tied to smartphone replacement cycles.
• 🎁 The custom chip deal with a large hyperscaler, together with deeper work with OpenAI on AI-focused smartphones, gives Qualcomm more ways to participate in AI spending beyond on-device phone processors.

What To Watch Going Forward

From here, it is worth tracking how quickly the automotive pipeline converts into sustained revenue, whether the hyperscaler ramps Qualcomm's custom AI chip through 2026, and how management talks about margins as these newer lines scale. Monitoring updates on the OpenAI device timeline, along with any comments on design wins versus competitors, will also help you judge how durable these new growth areas might be compared with the handset business.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.