Qualcomm's stock jumped as much as 9% during intraday trading on Sept. 8 before settling around 5% higher at $177 in mid-morning trading. Long known as a smartphone-chip maker, Qualcomm announced a partnership with Amazon on the day.
Qualcomm and Amazon Web Services announced they will jointly develop custom semiconductors for AI data centers across multiple generations. The chips are designed for inference—running trained AI models in production environments. The companies will also develop optical interconnect technology with speeds of up to 1.6 terabits per second.
How much was the gain and what is the current price?
As of mid-morning Eastern time on Sept. 8, Qualcomm stock was up $8.57 from the prior close to $177.32, a gain of 5.08%. Market capitalization expanded to $189.3 billion in a single day. Intraday, the stock had risen as much as 9%, reflecting strong investor enthusiasm for the news.
Over the past month, Qualcomm had lagged as smartphone market growth slowed. A single Amazon contract announcement reversed the stock's year-to-date losses, flipping a month's worth of selling pressure in a single trading session.
Why Amazon chose Qualcomm
The deal terms reveal Amazon's serious commitment. Qualcomm granted Amazon warrants to purchase as many as 25 million Qualcomm shares at $161.26 per share, valid through September 2036—a 10-year commitment. The deal is tied to a potential $60 billion business engagement.
Qualcomm CEO Cristiano Amon said, "As AI demand accelerates, data center infrastructure requires greater innovation in both computing and connectivity." AWS Vice President Prasad Kalyanaraman said the partnership reflects both companies' commitment to expanding in the space.
Nvidia effectively dominates the AI semiconductor market, prompting big tech companies to develop custom chips. Amazon already produces its own AI chip, Trainium. Adding an external partner like Qualcomm mirrors Broadcom's approach with Google and Meta.
By the numbers, how is the company performing?
In fiscal Q2 reported in April, Qualcomm posted non-GAAP EPS of $2.65 and revenue of $10.6 billion, beating expectations of $2.55 per share and $10.58 billion. The company's strategy to reduce smartphone dependence is beginning to show in the numbers.
| Item | Value |
|---|---|
| Sept. 8 Stock Price | $177.32 |
| Change | +5.08% |
| Q2 Revenue | $10.6 billion |
| Q2 EPS (Non-GAAP) | $2.65 |
| JPMorgan Price Target | $160 (neutral) |
JPMorgan's $160 price target remains below today's gain, reflecting concerns that Qualcomm's transition away from smartphones is slower than needed. Whether the Amazon deal changes that assessment depends on upcoming analyst reports. Price targets could move up or stay neutral.
What are the risks?
Specific revenue splits and volume commitments remain undisclosed. The warrants themselves are worth roughly $4 billion at current prices. The $60 billion figure is potential revenue, not confirmed orders. That amount would be realized over multiple generations of chips.
Competition is fierce. Broadcom already works with Google and Meta on custom chips. Nvidia retains the majority of the AI semiconductor market. Bank of America expects the custom data center CPU market to grow from $27 billion in 2025 to $60 billion by 2030, suggesting a crowded field ahead.
So where does Qualcomm stand?
Qualcomm's effort to shed its smartphone-chip identity now has concrete backing in Amazon, a powerful co-signer. The partnership adds a tangible path to the company's goal of $15 billion in data center revenue by 2029.
Two things to watch: whether data center revenue appears in the next quarterly report, and whether analysts raise price targets after the deal. With warrants expiring in 2036, this isn't a short-term event—it's a 10-year bet.
This is a U.S.-listed stock. This article is factual analysis, not a recommendation to buy or sell. Investment decisions and results remain yours alone.
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