Qualcomm surges on a strategic Amazon data center deal, while broader tech markets retreat as investors weigh AI safety risks and SAP's tempered 2026 profit outlook.
Qualcomm is successfully diversifying away from smartphone dependency by securing a multi-generation custom chip deal with Amazon for data center infrastructure. This strategic shift is supported by the company's goal to reach $40 billion in non-handset revenue by fiscal 2029, as confirmed by CFO Akash Palkiwala.
Qualcomm issued 25 million warrants to Amazon, vesting based on purchase orders totaling $60 billion.
Apple faces a pivotal moment with the debut of the iPhone Duo, its first foldable smartphone, and the upcoming Sept 9 'Surprise and Shine' keynote. While historical data suggests stock gains in the 60 days following iPhone reveals, the $1,999 price point for the new foldable device may limit mass-market adoption.
John Ternus succeeded Tim Cook as CEO on September 1.
Despite strong Q2 performance with 9% sales growth and a 27% increase in cloud backlog, SAP's stock remains under pressure due to management trimming its 2026 operating profit guidance. Investors are maintaining a cautious stance as the company attempts to prove its competitiveness in the AI-driven software market with a new platform launching in the fall.
Management adjusted the 2026 operating profit guidance to account for the impact of several recent acquisitions.
Amazon is deepening its infrastructure capabilities through a strategic partnership with Qualcomm to develop custom silicon and networking solutions. While the market reaction was muted, the deal secures long-term access to advanced processing power for AWS, aligning with the company's AI infrastructure goals.
Amazon gains access to customized silicon and connectivity solutions to support the next generation of AI infrastructure.
Tech stocks faced pressure as the Nasdaq dropped over 1% amid growing AI safety concerns and cautious sentiment toward SAP. Qualcomm shares climbed following a multi-generation chip partnership with Amazon, while Apple prepares for its September 9 keynote under new CEO John Ternus.
The deal marks a major milestone in Qualcomm's strategy to diversify revenue beyond smartphone chips and establish a foothold in the data center and AI infrastructure market.
Despite strong Q2 earnings and cloud growth, SAP's decision to trim its 2026 operating profit guidance due to recent acquisitions has left investors cautious.