Qualcomm Seals AI Data Center Deal with Amazon Web Services

Qualcomm has made a significant move in the AI data center sector with its deal with Amazon Web Services. The agreement allows AWS to purchase Qualcomm's server chip products, technology, systems, and manufacturing services.

In return for this access, Qualcomm issued a warrant to Amazon, granting it the right to acquire up to 25 million shares of Qualcomm common stock at an exercise price of $161.26 per share. This vesting is linked to purchase orders and payments up to a maximum of $60 billion.

The deal has prompted RBC Capital Markets to increase its price target on Qualcomm to $180 from $160, while maintaining its Sector Perform rating.

RBC analyst Srini Pajjuri noted that the overall revenue opportunity could potentially amount to around $6 billion in incremental annual revenue over the next 10 years, assuming full vesting. This is significantly higher than management's prior Data Center targets of around $300 million and $5 billion for FY26 and FY27, respectively.