Overview
- Qualcomm announced on Wednesday an all‑stock agreement to buy AI software startup Modular for about $3.92 billion and plans to issue up to 19.2 million new shares to Modular equity holders, with the deal expected to close in the second half of 2026 pending regulatory approval.
- At its Investor Day the company raised its long‑term targets to roughly $15 billion in annual data‑center revenue and $40 billion in non‑handset revenue by fiscal 2029, and said it expects to begin shipping some AI processors before the end of 2026.
- Qualcomm disclosed major hyperscaler commitments that give structure to the roadmap: Microsoft Azure will adopt its High Bandwidth Compute (HBC) architecture in mid‑2027 and Meta has committed to the Dragonfly C1000 CPU with production slated for 2028.
- Markets reacted strongly to the announcements with Qualcomm shares jumping into double‑digit gains as analysts raised price targets, though the expansion depends on execution, regulatory clearance for Modular, and supply factors such as tight high‑bandwidth memory availability.
- The strategy pairs custom silicon with Modular’s vendor‑neutral stack so developers can run models across CPUs, GPUs and NPUs without rewriting code, a move intended to blunt Nvidia’s CUDA lock‑in but one that still faces steep competition from incumbent GPUs and hyperscaler in‑house chips.