Qualcomm's warrant prices Amazon's $60bn ceiling at under a cent of equity per dollar

In March 2026, Qualcomm and Lightmatter jointly demonstrated 1.6 Tbps per-fiber optical throughput using a 16-wavelength dense-wavelength-division multiplexing design.

Under the agreement, Qualcomm will expand its use of Amazon Web Services' cloud services and Amazon Bedrock to run electronic design automation workloads aimed at reducing chip design cycles.

The warrant allows cashless exercise, and the warrant shares vest in tranches tied to the execution of certain commercial arrangements, the placement of binding purchase orders and actual purchases of Qualcomm's server chip products, technology, systems and manufacturing services by Amazon during the term.

Payments could potentially reach a maximum of $60 billion, with 3.75 million shares vested upon issuance of the warrant based on initial purchase commitments.

Qualcomm CFO Akash Palkhiwala confirmed at the Goldman Sachs Communacopia & Technology Conference that revenue from the partnership will begin in Qualcomm's fiscal first quarter of 2027, the December 2026 quarter, with chips already in production.

Bernstein analyst Stacy Rasgon wrote that the deal "may help provide more proof points for current targets" but "appears to be more a clarification on the current trajectory vs. providing for upside, which may temper reaction for now."

Qualcomm also has data-center engagements with Meta Platforms for central processing units and with Saudi Arabia's Humain for AI accelerators.

Palkhiwala noted that Qualcomm has another hyperscaler engagement it has not yet disclosed but which will be "similar to the transaction" with Amazon.

Intrinsic value per warrant share at Tuesday's intraday high was $22.23.

Across all 25 million warrant shares, intrinsic value at Tuesday's intraday high was about $556m.

That intrinsic value equals about 0.93% of the $60bn spending ceiling, or roughly 0.93 cents of equity per dollar of potential Amazon spend.

The already-vested 3.75 million shares were worth about $83m of intrinsic value at Tuesday's intraday high.

Exercise at the strike would represent $4.03bn of proceeds, which cashless exercise means Qualcomm does not collect.

Moving from $5bn in fiscal 2027 to $15bn in fiscal 2029 is a tripling over two fiscal years.

The June investor day targets predate the September 8, 2026 announcement by about three months.

According to Qualcomm's official chip specifications, Nvidia's flagship B200 carries approximately 180GB of HBM3e per card, while Qualcomm's AI200 supports up to 768GB of LPDDR per card.

The decode phase of inference, in which a model generates one token at a time, is memory-capacity-bound rather than bandwidth-bound: the bottleneck is whether the entire model can stay resident on the card, avoiding expensive data transfers.

The AI250, Qualcomm's next-generation card, is expected in calendar 2027 and uses a near-memory computing architecture; Qualcomm's specifications indicate more than 10x higher effective memory bandwidth than conventional DRAM configurations at significantly lower power.

The 3.75 million shares vested at issuance are 15% of the 25 million share block.

From the December 2026 quarter to the September 2036 expiry is about ten years, so the $60bn ceiling averages roughly $6bn a year.

That $6bn annual average is about 40% of Qualcomm's $15bn fiscal 2029 data-centre revenue target.

QCOM shares surged as much as 9.5% in Tuesday's session, touching an intraday high of $183.49, their strongest single-day gain in years and the stock's first positive return for the year, while Amazon shares slipped roughly 1%.

Qualcomm's stock was up 3.6% on Tuesday afternoon while Amazon's was down fractionally; Qualcomm shares are now positive for the year but have lagged the PHLX Semiconductor Index, up 69% in 2026 to date.

Amazon Web Services became Qualcomm's first Western hyperscaler customer for custom AI inference silicon, signing a multi-generational co-development agreement in which Amazon received a warrant to acquire up to 25 million Qualcomm shares, the full block vesting only if Amazon spends up to $60 billion on Qualcomm chips, networking hardware and manufacturing services through September 2036.

If vesting tranches scaled linearly with spend, an assumption the filing does not state, 15% vested would imply about $9bn of committed purchases.