Qualcomm ($QCOM) shares jumped nearly 10% in early trading after the chipmaker announced a multi-generation partnership with Amazon ($AMZN) to develop custom silicon for AWS’s expanding AI data centers. The companies will focus on AI inference chips and advanced optical connectivity capable of reaching 1.6 terabits per second and beyond.
The agreement could generate as much as $60 billion in business for Qualcomm. Amazon also received warrants to acquire up to 25 million Qualcomm shares at $161.26 each, representing a potential stake worth about $4 billion at the exercise price.
The deal strengthens Qualcomm’s push beyond smartphones into the rapidly growing AI infrastructure market dominated by Nvidia. Qualcomm expects data-center chip revenue to reach $5 billion in fiscal 2027 and $15 billion by fiscal 2029, with Amazon joining Meta and other major cloud customers supporting that expansion.
