Qualcomm Inc. (NASDAQ: QCOM) and Amazon.com Inc. (NASDAQ: AMZN) have entered into a strategic agreement involving custom silicon for artificial intelligence inference and optical connectivity. According to an analyst filing, the deal is expected to support Qualcomm's expansion into data center computing.
The agreement includes a ten-year warrant expiring September 3, 2036, allowing Amazon to purchase up to 25 million Qualcomm common shares at an exercise price of $161.26 per share. The warrant covers up to $60 billion in commercial payments, with an initial 3.75 million shares vesting at issuance based on binding commitments.
Patrick Moorhead, CEO of MoorInsightsStrategy, characterized the deal as a "net-net huge $QCOM win." He noted that while it does not establish a guaranteed $60 billion order, it provides evidence of Qualcomm's diversification away from Apple Inc. (NASDAQ: AAPL) product revenue. The collaboration will utilize AWS Bedrock infrastructure to shorten chip design cycles.
Qualcomm is targeting over $15 billion in data center revenue. Management previously forecast that two custom-silicon hyperscalers would contribute over $1 billion each in fiscal year 2027. However, the filing indicates that initial custom chips will dilute Qualcomm's QCT gross margins by 1.5 to 2 percentage points, though they will remain accretive at the operating level.
Futurum Group CEO Daniel Newman stated that securing Amazon as an anchor customer delivers "much-needed good news" and should "quiet the skeptics" regarding Qualcomm's data center entry. The partnership reinforces Qualcomm's position as a "highly capable partner" in an industry-wide capacity crunch.
At the time of the filing, Qualcomm stock was trading at $173.56 per share, down 0.30% in premarket trading. The stock was up 1.78% year-to-date and 8.64% over the last year.
