Qualcomm stock rises on AWS AI chip deal with $60 billion fine print

Qualcomm's push into data center silicon gained a significant validation with Amazon's decision to partner across multiple generations of customized chips for AI inference. This follows Qualcomm's June unveiling of the Dragonfly C1000 CPU, a product for which Meta is already a named 2028 customer, and a June increase of its fiscal 2029 non-handset revenue target from $22 billion to $40 billion.

The deal's structure reveals how conditional the opportunity remains. Amazon received warrants for 25 million Qualcomm shares at $161.26 per share, with vesting tied to commercial execution and purchases of up to $60 billion worth of server chips. Only 3.75 million shares vested at issuance based on initial purchase commitments. This arrangement frames the $60 billion as a ceiling dependent on successful execution rather than booked sales.

Qualcomm is focusing on AI inference and CPUs, avoiding the GPU training market where Nvidia dominates. The partnership is a vote of confidence from a major cloud provider, but it does not yet prove Qualcomm's broader challenge to Nvidia is succeeding. For Qualcomm, the outcome hinges on converting Amazon's initial commitments into binding orders and actual purchases at scale, while its smartphone business faces unresolved erosion concerns.