Qualcomm, Inc. (NASDAQ: QCOM) stock extended its gains overnight after a landmark artificial intelligence chip deal with Amazon Web Services signaled a major shift in the chipmaker’s strategic direction.
QCOM shares climbed 3.2% on Tuesday before adding another 1% in overnight trading, as analysts moved quickly to reassess the company’s long-term financial prospects.
Amazon Web Services will use Qualcomm’s custom silicon for AI inference and data-center networking, with the two companies also agreeing to develop optical cable and other equipment across multiple generations.
The partnership additionally grants Amazon the right to acquire up to $4 billion in Qualcomm stock, underlining the depth of the strategic commitment between the two firms.
Qualcomm CFO Akash Palkhiwala told Bloomberg that revenue from the Amazon deal will begin flowing in the December quarter, describing the agreement as “the first of many.”
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