Qualcomm stock jumps 4% as Amazon signs on for custom AI data center chips

Qualcomm QCOM shares were surging on Tuesday after the chipmaker announced a major deal.

The stock surged as much as 10% in early trading, but gave up most of those gains to trade around 4% higher at the time of writing.

The company said it has entered a multi-generational product collaboration with Amazon Web Services to supply customized silicon for large-scale AI data centers.

The deal marks the chipmaker’s third named hyperscaler partnership as it pushes into a market dominated by Nvidia.

The companies will work together across multiple generations of custom chips focused on AI inference, the process by which trained models generate outputs.

They will also jointly develop optical connectivity solutions extending up to 1.6T, built on Qualcomm’s SerDes and optical DSP technologies, to handle the bandwidth demands of AWS’s data center networks.

The pullback from the day’s high suggests some profit-taking once the initial reaction to the Amazon news settled in.

The stock has lagged the broader semiconductor sector for most of 2026. On a year-to-date basis, the stock is up around 1.5%, while the VanEck Semiconductor ETF is up over 50%.

Deal structured around a $60 billion warrant

As part of the agreement, Qualcomm issued Amazon a warrant to purchase up to 25 million QCOM shares at $161.26 each, according to Qualcomm’s regulatory filing.

Amazon receives an initial tranche of 3.75 million shares, with the remainder tied to commercial milestones that could total up to $60 billion in business under the deal.

The warrant expires on September 3, 2036.

Qualcomm also said it plans to deepen its own use of AWS infrastructure, including Amazon Bedrock, for electronic design automation work, aiming to shorten its chip design cycles.

“As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency,” Qualcomm CEO Cristiano Amon said in the companies’ joint statement.

Qualcomm’s third hyperscaler tie-up this year

The Amazon agreement follows Qualcomm’s June 2026 Investor Day, where the company laid out its AI data center strategy in detail, introducing the Dragonfly C1000 CPU and its High Bandwidth Compute architecture, alongside separately announced AI200 and AI250 inference accelerators built for Saudi-backed Humain.

At that event, Qualcomm named Meta and Microsoft as its first data center partners, Meta as a customer for the Dragonfly C1000 CPU, with production expected in the second half of 2028, and Microsoft backing Qualcomm’s High Bandwidth Compute architecture for Azure.

Qualcomm also told investors it was targeting $15 billion in data center revenue by fiscal 2029.

Amazon now becomes Qualcomm’s third named hyperscaler relationship.

The tie-up also puts Qualcomm in a slightly unusual position relative to Amazon’s own chip ambitions.

AWS already builds its own custom silicon, including the Trainium and Graviton lines, and CEO Andy Jassy said in his April shareholder letter that annualized revenue across Amazon’s chip products was already around $20 billion, with a path toward $50 billion if AWS begins selling to outside customers.