Qualcomm (QCOM) stock rose 3.9% in trading after StoneX reiterated a Buy rating and $270 price target, highlighting the chipmaker’s expanding data center ambitions and growing exposure to hyperscale customers.
The investment case comes as Qualcomm seeks to diversify beyond its core handset business, where demand remains uneven.
Analysts pointed to the company’s agreement with Amazon Web Services as a key development supporting its longer-term data center strategy.
AWS deal supports Qualcomm’s data center expansion
Qualcomm announced its collaboration with AWS on September 8, under which the chipmaker will supply custom silicon and advanced optical connectivity solutions.
The agreement could generate up to $60 billion in payments over multiple generations and the next decade.
The deal includes 25 million warrants issued to Amazon at an exercise price of $161.26.
Of those, 3.75 million shares are already vesting, while the remaining warrants depend on Amazon meeting payment milestones.
Unlike some recent AI chip agreements involving customer warrants, Amazon would have to pay $4 billion to acquire all of the shares.
Qualcomm’s stock would also need to remain above the $161 exercise price for Amazon to benefit from the warrants.
Qualcomm has set a target of $5 billion in data center revenue by fiscal 2027 and more than $15 billion by fiscal 2029.
The AWS agreement provides a publicly identified hyperscaler customer as the company works towards those targets.
At the Goldman Sachs Communacopia conference, Qualcomm’s CFO said the fiscal 2027 revenue target remains at $5 billion, with Amazon orders expected to begin in the December quarter.
Qualcomm targets growth beyond handsets
Stone Fox Capital said Qualcomm is executing a major pivot from handsets toward AI data centers, highlighting the AWS agreement as an important part of that strategy.
The firm noted Qualcomm’s $15 billion data center revenue target for fiscal 2029, while non-handset sales are projected to reach $40 billion.
It also said the AWS agreement could accelerate Qualcomm’s data center revenue ramp.
The Stone Fox Capital analyst added that the stock trades at roughly 10 times its fiscal 2029 earnings target of $18 per share, arguing that the market may not fully reflect the potential of Qualcomm’s AI-related growth.
The diversification push is also taking place as Qualcomm faces the loss of business from Apple.
Apple is increasingly shifting its iPhone modem operations toward internally developed technology, which could eventually cost Qualcomm around $4 billion to $5 billion in handset revenue, according to Counterpoint Research.
MediaTek adds near-term smartphone competition
Qualcomm’s data center expansion comes as competition remains active in its core smartphone market.
Rival MediaTek launched its Dimensity 9600 Pro, described in the supplied analysis as the first 2nm smartphone chip to market.
The launch comes one week before Qualcomm’s Snapdragon 8 Elite Gen 6 launch, scheduled for September 22–24.
The development adds pressure in the premium smartphone segment as Qualcomm prepares its next-generation mobile processor.
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