Amazon's $60 Billion Warrant: What It Really Means
Amazon's stock slipped by 0.3% on Tuesday, while Qualcomm saw a 3.6% increase in its share price following their announcement of a new AI-infrastructure collaboration.
The key detail for Amazon investors is that the $60 billion figure mentioned in the headlines does not represent a committed purchase or upfront payment from Amazon to Qualcomm.
Qualcomm's SEC filing shows that Amazon received a warrant for up to 25 million shares at an exercise price of $161.26, which can be exercised without cash and expires in September 2036.
The warrant is tied to commercial agreements, purchase orders, and actual purchases of Qualcomm server-chip products, systems, technology, and manufacturing services, with a maximum of $60 billion in qualifying payments.
Only 3.75 million shares have vested so far, based on initial purchase commitments, which would be worth around $51 million at Qualcomm's current price.