In the third quarter, Alphabet acquired a stake of close to $548 million in its longtime partner Qualcomm. The investment supports the chipmaker’s push into the data center market at a time when smartphone demand is suffering a severe slump.
Qualcomm’s stock gained 3% in premarket trading. On Thursday it had dropped by more than 9%, after weaker-than-expected results for the September quarter and a wider market sell-off that followed Democrats’ victory in the US midterm elections.
Qualcomm processors have for years been the engine behind nearly all the major smartphones running Google’s Android.
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More recently, the two companies teamed up on Googlebook, Google’s new high-end laptop line, which uses Qualcomm chips. In 2024, they also agreed to jointly develop chips and software to bring AI to the automotive sector.
Google’s investment arrives as Qualcomm works to grow its young data center business and become a key supplier in the AI infrastructure boom.
Over the past year, the chipmaker has been pitching custom AI processors to cloud providers, many of which are designing their own chips and looking for cheaper alternatives to Nvidia’s expensive hardware.
Qualcomm is targeting $15 billion in data-center chip revenue by 2029. In September, it signed an agreement with Amazon that lets the company purchase up to $60 billion worth of its AI data center chips and related products, and Amazon also received warrants to buy Qualcomm shares.
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Microsoft and Meta have further supported Qualcomm’s data-center ambitions by ordering its processors.
Separately, Google disclosed on Friday that it had slightly raised its holding in Elon Musk’s SpaceX to roughly 555 million shares from 551.2 million previously.
