Qualcomm shares climbed 4% on Tuesday, defying a broader Wall Street decline after the chipmaker announced a sweeping data center partnership with Amazon Web Services. The stock had initially surged as much as 10% before paring gains, signaling a mix of enthusiasm and profit-taking.
Under the agreement, Qualcomm issued Amazon a warrant to purchase up to 25 million shares at $161.26 each, a potential equity value of about $4 billion if fully exercised. The warrant expires on September 3, 2036, and Amazon receives access in tranches tied to commercial milestones. Those milestones include the execution of certain commercial arrangements and up to $60 billion in Qualcomm server chip and related product orders.
The two companies plan to work across multiple generations of customized silicon for AWS AI systems, with an emphasis on AI inference workloads and optical connectivity solutions reaching up to 1.6T. Qualcomm will leverage its SerDes and optical DSP technologies, while also deepening its use of AWS infrastructure, including Amazon Bedrock, for electronic design automation.
Qualcomm CEO Cristiano Amon said in a joint statement: “As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency.” The deal marks Qualcomm’s third named hyperscaler relationship following its earlier announcements with Meta Platforms and Microsoft. Qualcomm previously introduced the Dragonfly C1000 data center CPU, with Meta planning to use it once full production begins in 2028, and is targeting $15 billion in data center revenue by fiscal 2029.
The broader market backdrop remained cautious. The Dow Jones Industrial Average fell 574 points, or 1.1%, while the S&P 500 dropped 0.4% and the Nasdaq Composite declined 0.3%. Rising oil prices added inflation pressure ahead of U.S. PPI and CPI reports, and futures showed a 58% probability that the Federal Reserve will raise its benchmark interest rate by 25 basis points at its September 15-16 meeting. The 10-year Treasury yield hit its highest level since November 2023.
