Qualcomm's Amazon Deal Triggers Growth Expectations
Qualcomm's partnership with Amazon has validated its strategy of reducing dependence on smartphones. The two companies will jointly develop customized data center chips for AI inference and optical interconnect solutions. Amazon received warrants for up to 25 million QCOM shares at an exercise price of $161.26, linked to potential purchases of as much as $60 billion.
Qualcomm expects related revenue to begin contributing as early as the December quarter and targets roughly $5 billion in data center revenue by FY2027 and more than $15 billion by FY2029. This shifts Qualcomm's growth mix, with smartphones remaining an important cash-flow engine but constrained by Apple's migration towards internally developed modems and rising memory costs.
The company is building new revenue streams across automotive, IoT, PCs, and AI data centers, raising its FY2029 non-handset revenue target to $40 billion. If the Amazon partnership and broader data center expansion scale, earnings expectations for 2027 through 2029 could move higher.