A warrant 3M issued to Amazon this week is structured to vest largely as Amazon makes qualifying purchases of the manufacturer’s optical-connectivity and data center products. The deal gives Amazon the right to buy up to roughly 3.2 million shares, but does not guarantee purchases or provide 3M with cash upfront.
The warrant covers 3,162,015 shares at an exercise price of $164.89 each — a package worth roughly $521.4 million at that strike price, according to The Business Journals. Filing details reported by SEC.gov show that 85% of the shares vest incrementally as Amazon makes qualifying payments for 3M's optical connectivity and data center products, with vesting continuing until cumulative purchases hit $6 billion. The remaining 15% is tied to separate, unspecified event-based milestones. The warrant is an equity incentive, not a cash injection or a guaranteed purchase order.
Even if Amazon exercises every warrant share, the stake would amount to only about 0.6% of 3M, based on the company's outstanding share count as of October 2026. That's a minor minority position, not a change of control — more a supply-chain handshake than an acquisition.
How the Amazon-3M Warrant Works
The arrangement ties most of the warrant's vesting to Amazon's qualifying purchases of 3M's optical-connectivity and data center products, while the remaining portion is tied to separate milestones.
For 3M, the deal concerns optical connectivity and data center hardware. The company also makes Expanded Beam Optical connectors.
Data-center demand and electricity use
The U.S. Department of Energy, summarizing a Lawrence Berkeley National Laboratory report, said U.S. data centers used about 4.4% of the country’s electricity in 2023 and could account for 6.7% to 12% by 2028. Lawrence Berkeley National Laboratory’s 2025 update estimates a 11.8% share by 2030, with scenarios ranging from 9.5% to 15.3%. The same laboratory report says networking’s share of data-center electricity consumption rose from 3.4% in 2018 to 4.5% in 2024. Globally, the International Energy Agency projects data-center electricity consumption will more than double to around 945 terawatt-hours by 2030. These sector-wide estimates provide context for demand but do not establish Amazon’s purchases from 3M or compare optical links with electrical connections.
Microsoft Got There First
Amazon is not the first hyperscaler to bet on 3M's optical hardware. Microsoft Azure became the first major cloud provider to publicly announce deployment of 3M's Expanded Beam Optical technology across its AI data center network, back on July 15, 2026, according to Photonics Spectra. That earlier deal, paired with the new Amazon warrant, gives 3M validation from two of the industry's largest cloud buyers within a few months of each other.
3M is also working to make sure it can produce optical hardware for growing demand. The company announced a manufacturing collaboration with Taiwan-based Genius Electronic Optical to advance Expanded Beam Optical development and manufacturing, alongside a private placement through which 3M would take an approximate 4.7% stake in the Taiwanese optics manufacturer, expected to close in the fourth quarter of 2026. The collaboration focuses on developing and manufacturing Expanded Beam Optical solutions.
Earnings Beat Adds to the Momentum
The warrant disclosure landed the same day 3M reported third-quarter adjusted earnings of $2.50 per share, beating Wall Street's consensus estimate of $2.39, and raised its full-year adjusted earnings guidance to a range of $9.10 to $9.15 per share, PR Newswire reported. The report also included the company's revised full-year adjusted earnings guidance.
During the earnings disclosures, Bill Brown estimated 3M's overall data center revenue at approximately $600 million for 2026, according to TIKR.com, while projecting that the total addressable market for expanded-beam optical technology will reach $1 billion in 2026 and grow to $2 billion by 2028. The $6 billion cumulative-purchase threshold is a vesting benchmark, not a forecast of annual revenue.
Wall Street's reaction suggests investors see 3M pulling ahead of its optical hardware peers for now. Shares jumped more than 5% to above $170 on Tuesday, significantly outperforming competitors like Coherent, which rose 1.3%, and Corning, which closed flat, according to 24/7 Wall St. Whether Amazon's eventual purchases represent entirely new business or simply an extension of existing commercial activity between the two companies is a question that remains unresolved, per TIKR.com's reporting.
