AI data center layout momentum draws investor attention! Qualcomm (QCOM.US) stock climbs to a two-month high.

As investors grow increasingly optimistic about Qualcomm's (QCOM.US) strategy to enter artificial intelligence (AI) data center infrastructure, the chipmaker is drawing more attention. Qualcomm closed up 4.25% at $187.80 on Tuesday, touching a two-month high, and continued to edge higher in premarket trading on Wednesday. Last week, Qualcomm announced a multi-generation partnership with Amazon.com, Inc. (AMZN.US) under which the two companies will jointly provide scalable custom chips for large-scale AI data centers and collaborate on AI inference. In addition, the two companies will jointly develop optical interconnect solutions supporting speeds of up to 1.6T, as well as future-facing next-generation related technologies. Under this long-term cooperation arrangement, Amazon.com, Inc. may purchase Qualcomm AI data center chips and related products with a total value of up to $60 billion. In this partnership, Qualcomm provided "warrants." The company granted warrants for 25 million Qualcomm shares at an exercise price of $161.26 per share (meaning Amazon.com, Inc. has the right to purchase at that price), corresponding to a value of $4 billion, expiring on September 3, 2036. This partnership is undoubtedly a major victory for Qualcomm. It matters because Qualcomm has long been viewed primarily as a smartphone chip company. Its business is highly dependent on the smartphone market, which grows more slowly and has more cyclical demand than AI data centers. In addition, in recent years, Qualcomm's core smartphone business has also faced uneven demand for a variety of reasons. Investors have also viewed Qualcomm's business exposure to Apple Inc. as a drag, because Apple Inc. has long been working to develop its own modem. At the same time, compared with NVIDIA Corporation, Broadcom Inc., and other semiconductor stocks, Qualcomm's participation in the hyperscaler AI infrastructure boom that has driven those stocks higher had previously been relatively limited. As a result, Qualcomm's stock performance has lagged much of the semiconductor sector during this AI-driven rally. The agreement with Amazon.com, Inc. changes that narrative, because it not only brings Qualcomm a heavyweight hyperscaler partner, but also gives it a path to clearer business diversification away from reliance on smartphones. The company is now targeting AI inference workloads, and its emphasis on energy-efficient processing power may help it gain a foothold in the data center space, which has reignited investor interest in the stock. Qualcomm's tie-up with Amazon.com, Inc. comes at a critical time. Qualcomm's third-quarter revenue fell 4% to $9.95 billion, and net income dropped to $2 billion from $2.67 billion a year earlier, as a 20% decline in phone sales, higher input costs, and supply chain pressures weighed on results. The company also issued fourth-quarter profit guidance below market expectations. According to Koyfin data, 23 of 37 analysts currently recommend a "hold" rating on Qualcomm stock, 11 recommend "buy" or higher, and 3 give a "sell" or lower rating. The average analyst price target is $194.13, implying 3.4% potential upside from the stock's previous trading day close. Qualcomm's current performance is still concentrated in traditional areas such as smartphones, and the company is eager to transition into high-growth areas such as data centers. Qualcomm has successively acquired Nuvia and Alphawave, thereby building four segments in the data center space: custom ASIC, connectivity, AI accelerators, and server CPUs. Specifically, in the data center space, connectivity products are the fastest to contribute revenue. Alphawave, which Qualcomm acquired, already has the capability to produce SerDes IP, 800G optical DSP, and related products, and subsequent 1.6T products are also expected to launch between 2026 and 2027. Qualcomm's custom ASIC business was also obtained through the acquisition of Alphawave Semi, and custom ASIC products are expected to begin launching in the first quarter of fiscal 2027, which is also one of the key points of the agreement signed with Amazon.com, Inc. this time. After Qualcomm previously announced its entry into the data center space, its stock price once rose above $250. Later, even though management provided data center revenue guidance for fiscal 2027-2029, the stock price still fell back to around $150-160. After all, Qualcomm's data center business has not yet made an obvious revenue contribution, and the market remains "skeptical" about its data center business. Qualcomm's announcement this time of cooperation with Amazon.com, Inc. (including a purchase commitment) will undoubtedly increase the "certainty" of growth in its data center business.