Qualcomm Shares Surge Up To 10% On Multi-Year Amazon AI Chip Deal Worth Up To $60 Billion Signed

SAN DIEGO — Qualcomm Inc. shares surged as much as 10% Tuesday after the company announced a multi-generational collaboration with Amazon to build customized silicon and advanced connectivity solutions for Amazon Web Services' rapidly expanding artificial intelligence data center infrastructure, marking one of the chipmaker's most significant moves yet into the AI infrastructure market.

Qualcomm Technologies said it will work with Amazon across multiple generations of customized silicon to support AWS's AI infrastructure, with an initial focus on AI inference workloads, the process of running already-trained AI models efficiently at scale. The companies will also jointly develop high-performance optical connectivity solutions, including interconnects supporting speeds up to 1.6 terabits per second, drawing on Qualcomm's advanced SerDes and optical DSP technologies to address growing bandwidth bottlenecks within AWS data centers.

Qualcomm President and CEO Cristiano Amon framed the partnership as a direct response to the accelerating infrastructure demands of the AI industry.

"As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency," Amon said. "Qualcomm is pleased to work with AWS on customized silicon and connectivity solutions, bringing decades of leadership in advanced processing and power-efficient compute, to deliver breakthrough performance and enable the next generation of AI infrastructure."

AWS Vice President Prasad Kalyanaraman echoed that framing from Amazon's side of the partnership.

"This collaboration with Qualcomm Technologies builds on a strong foundation of partnership and reflects our shared commitment to pushing the boundaries of what's possible," Kalyanaraman said. "By working together on customized silicon and advanced connectivity, we're delivering more performant, efficient, and cost-effective infrastructure for our customers."

As part of the expanded relationship, Qualcomm also said it plans to deepen its own use of AWS's AI infrastructure, including Amazon Bedrock, specifically for electronic design automation workloads tied to chip design, with the goal of shortening its own internal chip development cycles.

The financial terms of the deal include a significant equity component. According to CNBC, Qualcomm issued Amazon a warrant to acquire up to 25 million shares of Qualcomm common stock at an exercise price of $161.26, a stake worth approximately $4 billion at that price. According to TipRanks, the warrant can be exercised without any cash payment and remains valid until 2036, with shares vesting in stages tied to Amazon signing commercial deals, placing firm orders, and purchasing Qualcomm's server chips and related technology and services, up to a total cap of $60 billion.

Wall Street's reaction to the announcement was immediate and pronounced. Qualcomm shares jumped as much as 9% to 10% in Tuesday trading, according to multiple reports, marking one of the stock's largest single-day gains in months and adding roughly $9 billion to the company's market value in a single session. The move came even as the broader market traded lower, with the SPDR S&P 500 ETF Trust down 0.47% during the same session, underscoring the deal-specific nature of Qualcomm's rally.

The rally proved significant in the context of Qualcomm's broader 2026 stock performance. According to 247wallst.com, Qualcomm shares had been up just 5% year to date heading into Tuesday's session, meaning the single day's gain accounted for essentially all of the stock's advance for the year up to that point. By comparison, the broader PHLX Semiconductor Index had climbed 68% over the same period, leaving Qualcomm notably behind many of its chip industry peers before Tuesday's announcement helped narrow that performance gap.

Rival chipmaker Broadcom, which has its own established custom AI silicon relationship with several major hyperscale cloud providers, also saw its shares tick higher on the news, rising roughly 3% in a "read-through" reaction reflecting broader investor enthusiasm for the custom AI silicon category as a whole. Amazon shares, meanwhile, traded roughly flat to slightly lower following the announcement, a muted reaction analysts attributed to the deal being read primarily as a Qualcomm growth story rather than a material development for Amazon's own results.

The Qualcomm-Amazon partnership extends AWS's broader custom-chip strategy beyond its existing in-house Trainium AI processors and its established relationship with incumbent supplier Broadcom, adding a third major silicon partner to Amazon's AI infrastructure roadmap. According to AOL's reporting, AWS's total infrastructure backlog stood at $496 billion, with Amazon on pace to double its power capacity by the end of 2027 compared with 2025, underscoring the scale of demand driving the company's search for additional silicon suppliers. AWS revenue reached $42.2 billion in Amazon's most recent quarterly report, up 36.7% year over year, marking the segment's fastest growth rate in 18 quarters and reflecting an annualized revenue run rate of $169 billion.

The deal marks Qualcomm's second major hyperscale cloud partnership disclosed this year, following the company's earlier unveiling of its Dragonfly C1000 data center processor in June, a chip Qualcomm has said Meta Platforms plans to deploy in production starting in 2028. Qualcomm has set a target of reaching $15 billion in data center revenue by fiscal 2029 as part of its broader strategic pivot beyond its traditional smartphone chip business, even as that pivot comes with lower gross margins on custom silicon compared with the company's historical mobile chip business, alongside a roughly 20% decline in handset revenue that has continued weighing on Qualcomm's overall results.

With the Amazon partnership now formally announced and Qualcomm's market capitalization sitting near $189.7 billion, well below Broadcom's roughly $1.755 trillion valuation, investors and analysts are likely to continue closely tracking how quickly the newly announced collaboration translates into concrete revenue for Qualcomm, given that Tuesday's stock surge reflects considerable optimism about the deal's long-term potential even before any meaningful near-term financial impact has materialized.