Qualcomm's Q3 2025: Key Contradictions on Data Center Revenue, Apple Impact, and AI Strategy

Data center revenue contribution timeline, Apple revenue impact on margins, data center business strategy and growth, AI expansion in mid-tier phones are the key contradictions discussed in Qualcomm's latest 2025Q3 earnings call.



Strong Performance in Non-Apple Revenue:
- Qualcomm reported a 12% revenue growth and a 16% increase in non-GAAP EPS for fiscal '25 compared to fiscal '24.
- Growth was driven by strong performance in QCT non-Apple revenues, particularly in automotive and IoT segments.

Automotive and IoT Revenue Growth:
- QCT automotive revenues reached $984 million, an 21% year-over-year increase, while IoT revenues grew 24% year-over-year to $1.7 billion.
- This growth was fueled by increased demand for automotive and IoT products like Snapdragon Digital Chassis and Snapdragon AR1.

Snapdragon Platform Expansion:
- Snapdragon platforms powered 124 designs in handsets and 19 designs in XR devices, indicating the expansion of the Snapdragon ecosystem.
- The growth in Snapdragon platforms is driven by partnerships with major OEMs and increased adoption in emerging fields like AI smart glasses.

Data Center and AI Strategy:
- Qualcomm's entry into the data center market is focused on building AI inference accelerator cards and custom SoCs leveraging the acquisition of Alphawave IP Group.
- The strategic move is aimed at capturing a significant share of the growing AI inference market and is expected to contribute to revenue starting in fiscal '28.