Qualcomm's Amazon Deal Sends Stock Soaring on Warrant and Data Center Hopes
Qualcomm's stock surged by as much as 10% on Tuesday after the company announced a multi-generational agreement to co-develop custom silicon and high-speed optical connectivity for Amazon Web Services data centers.
The deal, which is Qualcomm's second hyperscaler commitment this year, includes a warrant that gives Amazon the right to purchase 25 million common shares of Qualcomm stock at $161.26 each. This represents about $4 billion in potential value, although Amazon has not yet exercised its option.
The equity component of the deal aligns Amazon's incentives with Qualcomm's share price, creating a strong partnership that could drive significant revenue for the chipmaker. Qualcomm is targeting $15 billion in data center sales by fiscal 2029, and this agreement is a crucial step towards reaching that goal.