3M's Amazon Deal Advances Data Center Growth Opportunity, RBC Says

11:37 AM EDT, 10/21/2026 (MT Newswires) -- 3M (MMM) could see a significant expansion of its data center business under a new deal with Amazon (AMZN), while steady industrial demand supports growth and potential PFAS liabilities remain an overhang, RBC Capital Markets said. The investment firm raised its 2026 earnings per share estimate to $9.15 after 3M's Q3 operating earnings beat its forecast by 3.5 cents a share, or 1%, and the company lifted its full-year cash EPS guidance by 10 cents. Under the Amazon agreement, 3M will issue warrants for about 3.2 million shares, with 85% of the warrants vesting based on qualifying Amazon payments and that portion fully vesting at $6 billion in cumulative payments over seven years. The threshold compares with 3M's current total data center revenue of about $700 million across all customers, with the Amazon relationship expected to ramp toward late 2027, according to the note Tuesday. 3M also announced a manufacturing and development partnership with GSEO that includes a planned 4.7% equity stake to scale production of expanded beam optical connectivity products, which currently generate about $45 million in annual revenue. RBC maintained its underperform rating and raised its price target to $135 from $132, citing the expanded data center opportunity alongside the risk from potential PFAS liabilities. Price: 170.87, Change: -0.50, Percent Change: -0.29