Qualcomm shares hit a two-month high after the chipmaker unveiled a multi-generational agreement with Amazon Web Services that could unlock up to $60 billion in commercial opportunity over the next decade.
The deal structure
Amazon received warrants for 25 million Qualcomm shares at an exercise price of $161.26, a package valued at roughly $4 billion that vests only as commercial milestones are met and AWS purchases Qualcomm products. The chips themselves are customised for inference workloads, and Qualcomm will also supply high-speed optical connectivity for data centres.
Revenue targets and the smartphone hole
Management is guiding for data-centre revenue of about $5 billion in fiscal 2027, climbing past $15 billion by fiscal 2029, part of a broader push to reach $40 billion in non-handset sales by that same year. The urgency is visible in the handset business: smartphone revenue dropped 20 percent from a year earlier to $5.09 billion in the fiscal third quarter.
Wall Street reaction
StoneX analyst Cody Acree kept a Buy rating and a $270 price target, while RBC lifted its target to $180 from $160. The first revenue from the Amazon relationship is not expected until the December 2026 quarter, so execution risk sits front and centre for investors.
What to watch
The warrants tie Amazon's upside to actual procurement, which aligns incentives but also means the $60 billion figure is a ceiling, not a commitment. Investors will track whether Qualcomm can convert design wins into recurring revenue fast enough to offset the handset decline.