An SEC filing outlines conditional warrant vesting rather than a guaranteed order of that size.
Qualcomm shares jumped as much as 9% Tuesday morning after reports of a multi-generation partnership with Amazon Web Services to develop custom AI inference chips and optical interconnect technology. A later reported snapshot put the stock up 3.38% at $174.45, below its earlier gain.
What Amazon’s warrant means
The filing provides a narrower description than the headline dollar figure suggests. In a Form 8-K filed with the SEC, Qualcomm said it issued Amazon a warrant on for up to 25 million shares at a strike price of $161.26, exercisable over 10 years. Only 15% of that warrant vested immediately, tied to purchase commitments Amazon has already made. The remaining 85% is unvested and depends on Amazon hitting future purchase milestones that could total up to $60 billion over the life of the agreement, a figure the filing explicitly frames as a ceiling, not a signed commitment.
That distinction matters for how investors should read this deal. Qualcomm has guided to $5 billion in data-center revenue by fiscal 2027 and $15 billion by fiscal 2029, alongside a 30% operating-margin target within three years, numbers that would represent a real and growing business if they materialize. Broadcom, AWS's incumbent custom-silicon partner, rose 2.54% the same day, while Nvidia slipped 1.81%, though nothing ties that move specifically to the Qualcomm news rather than the day's broader volatility.
Structures like this one, equity warrants issued in exchange for future purchase commitments, are becoming more common in the AI infrastructure buildout. A similar arrangement exists between Marvell and Alphabet, involving warrant rights to roughly $12.2 billion of Marvell stock. Neither Qualcomm's deal with Amazon nor Marvell's with Alphabet is the industry's first such structure, whatever the framing in early coverage suggested.
What remains unknown is how much Amazon has actually committed to purchase beyond the threshold that triggered the initial 15% vesting, and how quickly additional tranches will vest as the relationship matures. Qualcomm's next earnings report, expected in early November, could provide more detail on purchase commitments and the timing of revenue.