Amazon AI chip deal gives Qualcomm stock a boost
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Qualcomm’s AI data-centre bet gains momentum
Qualcomm shares climbed to a two-month high as investors focused on the chipmaker’s growing push into AI data centres. The company is looking to expand beyond smartphones, with its data-centre business emerging as an important new growth driver. Qualcomm is targeting more than $15 billion in data-centre revenue by FY2029. (Sources: GuruFocus, TradingView)
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Amazon deal opens new growth avenue
Qualcomm and Amazon have announced a multi-generational collaboration focused on AI data-centre infrastructure. Amazon Web Services is expected to use Qualcomm’s customised AI chips for inference workloads, while Qualcomm will also provide high-speed optical connectivity solutions for data centres. The broader commercial opportunity could reach up to $60 billion over 10 years.
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$4 billion equity component
As part of the agreement, Qualcomm granted Amazon warrants to acquire up to 25 million Qualcomm shares. The warrants have an exercise price of $161.26 per share, representing a potential value of around $4.03 billion. Their vesting is linked to commercial milestones and Amazon’s purchases of Qualcomm products and services.
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Qualcomm targets $15 billion data-centre revenue
Qualcomm expects its data-centre business to generate around $5 billion in revenue in FY2027, with that figure rising to more than $15 billion by FY2029. The company is also targeting $40 billion in total non-handset revenue by FY2029, highlighting its strategy to diversify into automotive, IoT and AI infrastructure.
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Beyond smartphones
Qualcomm is increasingly looking beyond its traditional smartphone business for growth. Its handset revenue fell 20% year-on-year to $5.09 billion in fiscal Q3, according to the GuruFocus report. The company is therefore expanding its presence in automotive, IoT and data centres, with AI chips and connectivity solutions becoming key parts of its diversification strategy.
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Wall Street’s focus shifts to AI growth
The Amazon agreement has strengthened the focus on Qualcomm’s potential in the AI infrastructure market. According to GuruFocus, StoneX analyst Cody Acree maintained a Buy rating with a $270 price target, while RBC raised its target to $180 from $160. Qualcomm expects revenue from the Amazon relationship to begin in the December 2026 quarter, making execution a key focus for investors.