Story
Qualcomm Shares Surge on $60 Billion AI Chip Deal with Amazon Web Services
Summary
The chipmaker's stock has rallied significantly after announcing a multi-generation collaboration with AWS, which includes potential purchases of up to $60 billion in AI chips and products.
Qualcomm's stock (NASDAQ:QCOM) has posted significant gains after the company announced a major, multi-generation collaboration with Amazon Web Services centered on artificial intelligence data-center chips. The deal underscores the intense demand for AI infrastructure and provides a substantial new revenue channel for the chipmaker.
Details of the Partnership
The agreement, announced on September 8, allows Amazon Web Services (AWS) to purchase up to $60 billion of Qualcomm’s AI data-center chips and related products. The deal also includes $4 billion in stock warrants, giving Amazon the right to purchase Qualcomm shares at a price of $161.26.
This collaboration aligns with Qualcomm's strategic push into the high-growth data center market. The company has publicly stated its ambition to achieve $15 billion in data-center revenue by 2029, and the AWS partnership represents a major step toward that goal.
Market Reaction and Analyst Upgrades
AdInvestors reacted positively to the news, sending Qualcomm shares up as much as 6.9% to $180.41 on the day of the announcement. As of September 14, the stock was up 8.71% for the month, holding onto most of its gains despite some profit-taking related to potential dilution from the warrants.
The deal prompted positive reactions from Wall Street analysts:
- RBC Capital raised its price target on the stock to $180 from $160 on September 9.
- Piper Sandler upgraded the stock on September 11.
- The average analyst price target has since risen to approximately $194, according to the source material.
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