Founded in 1993, The Motley Fool is a financial company committed to making the world smarter, happier, and richer. The Motley Fool reaches millions of people each month through our premium investment solutions, free recommendations and market research in Fool. com, private finance education, top-notch podcasts, and the nonprofit Motley Fool Foundation.
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, personal finance education, top-rated podcasts, and non-profit The Motley Fool Foundation.
The server CPU market has long been ruled by Intel (INTC 9. 25%) and AMD (AMD 2. 55%). Both corporations manufacture chips with x86 architecture. Although there are other types of processors used for specialized purposes (think IBM mainframes), x86 is ideal in the knowledge center. The software is compiled and optimized for x86 chips, which incurs significant switching costs.
Qualcomm has already tried once, unsuccessfully, to introduce chips on the Arm architecture, which dominates the smartphone market, into the server market. Qualcomm’s Centriq server processors failed to gain traction when they were introduced in 2017, leading the company to drastically scale back its efforts. The move to Arm chips or mix architectures simply wasn’t cost-effective for primary server processor customers.
Qualcomm released its first processors for Arm-based PCs last year, and while they weren’t exactly a flop, in part due to compatibility issues, Arm-based PCs are likely to exist to stay. Now it looks like Qualcomm is going to re-enter the server processor market with new chips.
According to a LinkedIn post, Sailesh Kottapalli, Intel veteran and lead architect of the Xeon server processor family, is joining Qualcomm after nearly three decades at Intel. In December, Qualcomm revealed in a project release that its data center team runs on server products for data center applications. Kottapalli is expected to lead this effort.
Although Qualcomm’s PC chips have trouble running certain types of applications, such as gaming and emulation, they offer counterfeit functionality and efficiency. Qualcomm can leverage this work to conquer the data center market.
Back in 2018, Qualcomm had little chance of success with its Centriq server CPUs. There was too much inertia behind x86, and the software ecosystem was centered around the dominant architecture.
Qualcomm might have better luck this time around thanks to artificial intelligence. Tech giants like Microsoft are spending mountains of money building brand new AI datacenters, and some are even designing their own Arm-based CPUs. The software stack is still evolving, and with Microsoft, Amazon, and others now getting behind Arm-based server CPUs, there’s a lot more momentum in 2025 than there was in 2018.
Even if the environment is more welcoming to Qualcomm, the company will face internal chip design efforts from potential customers, as well as any other company that enters the market. Nvidia already sells its Grace range of intermediate data processors based on the Arm architecture, and others could move forward as Arm gains traction.
While Intel and AMD will face more competition if Qualcomm reenters the server CPU market, both companies have solid product lineups that will be tough to beat. Intel improved its competitive positioning last year with its powerful Granite Rapids chips and efficiency-focused Sierra Forest chips, and this year it plans to use its cutting-edge Intel 18A manufacturing process for Clearwater Forest.
Meanwhile, AMD officially launched its Turin family of server CPUs in October, which goes up to 192 cores. Included in the lineup is a CPU specially designed to act as the host node CPU for a cluster of AI accelerators. AMD’s last-generation server CPUs were a big hit, and the company will look to build on that progress.
Qualcomm seems to be gearing up to return to the server processor market. This time it will take longer than last time as the environment is much more conducive to Arm-based processors, but the festival will be fierce.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Intel, Microsoft, Nvidia, and Qualcomm. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short February 2025 $27 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Market insight driven through Xignite and Polygon. io.