3M Gives Amazon a Stock Warrant Tied to $6 Billion in Purchases

3M told the SEC on Monday evening that it had issued a seven-year warrant to an Amazon subsidiary. The warrant covers 3,162,015 shares at an exercise price of $164.89 each.

Eighty-five percent of it comes with a condition. It vests in steps as Amazon pays 3M for optical connectivity and other data center products, and fully vests once cumulative payments reach $6B. The remaining 15% depends on event-based milestones the filing does not describe.

The same day, 3M said it plans to buy roughly 4.7% of Genius Electronic Optical (GSEO), a Taiwanese optics maker. DIGITIMES reports the investment at about $147M (NT$4.8 billion).

3M's Optical Connectivity Business

Most investors know 3M for tape and industrial materials. Its AI product is called Expanded Beam Optical (EBO). It is a connector that joins fiber cables inside data centers, widening the light beam so it tolerates dust and misalignment better.

In March, the company said it would more than double its US EBO production capacity. The GSEO partnership targets volume production of EBO parts and co-packaged optics, where optics sit in the same package as the chips. In July, Microsoft also signed on to use the product in Azure data centers.

The market priced the news fast. 3M closed the regular session down 1.66% at $162.01, then rose 5.43% after hours to $170.80. Amazon gained 4.98% the same day after Morgan Stanley named it a top pick.

Why Amazon Wants Stock

The market read the deal as a sales contract. For Amazon, it is a price discount.

A large buyer usually asks a supplier for a cash discount. A warrant instead pays that discount as a future equity stake, and ties its size to the supplier's share price. Working the numbers at fixed prices shows how it works.

The structure aligns both sides. The more Amazon buys, the more rights it earns; the higher 3M's stock goes, the more those rights are worth. Dilution for 3M stays small: 3.16 million shares are 0.61% of the 515.7 million outstanding as of June 30.

The accounting matters too. Under US rules, rights like these granted to a customer are generally recorded as a reduction of revenue. As the warrant gains value, it comes out of 3M's reported revenue.

Amazon's Supplier Ledger

3M is not the first. Amazon struck two similar deals in September, and each sets a different ratio between the purchase ceiling and the equity granted.

On September 16, Generac gave Amazon the right to buy 1.69 million shares at $200.93, mostly tied to $8B of generator payments. The stock jumped about 40% after hours. In a deal announced September 8, Qualcomm granted a warrant for 25 million shares at $161.26, against up to $60B of potential purchases.

At both Generac and 3M, the first jump in the supplier's market value exceeded the size of the warrant. In 3M's case, the $4.5B gain is roughly eight times the $521M warrant at its exercise price.

The six-month view shows where 3M traded before it gained a data center identity. The Nasdaq 100 chart below frames the tech basket Amazon belongs to.

The Part That Doesn't Fit

The $6B is a vesting threshold, not a purchase commitment. The filing does not say how much Amazon will buy or when; at Generac, initial deliveries for 2027-2028 were capped at $2.4B.

Spread over seven years, $6B averages about $860M a year. That is a small slice of 3M's annual revenue; the 5.4% move reflects the value placed on a data center identity more than the sales themselves.

What It Means for Investors

• The market priced Amazon's endorsement of 3M; it could not yet price the timing or margins of purchases, because the filing does not include them.
• At Amazon suppliers such as 3M, Qualcomm and Generac, a warrant reads as a sign of customer commitment; the same warrant is deducted from the supplier's reported revenue.
• The first date to watch is 3M's third-quarter report today and any guidance on EBO revenue; the second is Amazon's capex guidance on October 29.
• The risk that breaks the thesis is Amazon cutting data center spending; if the threshold is not met, neither the warrant nor the expected sales materialize.

Masthead: Warrant terms come from 3M's SEC filing dated October 19, 2026, and the GSEO partnership from 3M's press release of the same date; the investment amount is as reported by DIGITIMES. Generac terms come from the company's SEC filing dated September 16, and Qualcomm terms from secondary reports. Price moves rely on Benzinga and Motley Fool; ratios and scenarios are Açılış Zili's own calculations, showing intrinsic value at the exercise price, not the warrant's market value. For background: Options.