AMD joins OpenAI's party, potentially breaking Nvidia's monopoly.

AMD is challenging Nvidia's monopoly by joining OpenAI's party. The company's attempt to drive growth through dilutive deals has triggered an overly fast and furious rally, with AMD's stock price experiencing a triple-digit recovery.

Advanced Micro Devices (AMD) has made a significant stride in the AI chip market by securing a multi-year deal with OpenAI. This strategic partnership, which involves supplying hundreds of thousands of GPUs worth billions in annual revenue, is set to reshape the competitive landscape dominated by Nvidia (NVDA).

Under the terms of the agreement, AMD will deliver hundreds of thousands of its graphics processing units (GPUs), equivalent to six gigawatts of capacity, starting in the second half of 2026. This deployment includes OpenAI constructing a one-gigawatt facility powered by AMD’s forthcoming MI450 series chips, with revenue recognition commencing next year. Executives at AMD project this partnership alone will generate tens of billions of dollars in annual revenue, while the broader ripple effects could unlock more than $100 billion in new revenue over four years from OpenAI and additional customers AMD Soars After Striking Major Deal with OpenAI^[1].

The arrangement extends beyond hardware supply, granting OpenAI the option to acquire up to roughly 10% of AMD through a warrant for 160 million shares at 1 cent each, vesting in tranches tied to milestones. The initial vesting occurs after the first MI450 shipments in the second half of 2026, with subsequent portions linked to escalating AMD stock price targets culminating at $600 per share AMD Soars After Striking Major Deal with OpenAI^[1].

This deal has had immediate market reactions, with AMD shares surging more than 25% to $206.16 in premarket trading, on pace for their highest open since March 2024. In contrast, NVDA dipped 2%, and AVGO fell 3%, signaling investor recalibration amid intensifying rivalry AMD Soars After Striking Major Deal with OpenAI^[1].

AMD is not only challenging Nvidia’s dominance in AI chips but also in the broader CPU market. The company’s high-performance Ryzen PC chips and EPYC server processors have been stealing market share from Intel, with Intel reportedly in talks to produce chips for AMD via its new foundry business AMD’s Stock Skyrockets After Blockbuster OpenAI Deal – What It Means for Investors in 2025^[2].

Analysts are broadly bullish on AMD’s prospects, with many firms raising price targets in light of the company’s AI momentum. HSBC doubled its target to $200, projecting a “big reversal” with over $8 billion in AI revenue this year, while UBS recently upped its target to $210 citing strong server chip demand. Jefferies upgraded AMD to “Buy” with a Street-high $300 target AMD’s Stock Skyrockets After Blockbuster OpenAI Deal – What It Means for Investors in 2025^[2].

However, skeptics note that AMD’s stock now trades at 90×+ earnings, a rich price that “leaves little room for error” if growth falters. They warn that Nvidia still controls ~94% of the AI GPU market and that AMD must execute flawlessly to justify its hype AMD’s Stock Skyrockets After Blockbuster OpenAI Deal – What It Means for Investors in 2025^[2].

As of early October 2025, AMD trades around $200 per share – up sharply from the ~$150s just a few weeks prior, and roughly 50–60% higher year-to-date. The stock’s latest spike came after news of the major AI partnership sent investors into a buying frenzy, adding about $80 billion in value – its biggest one-day jump since 2016 AMD’s Stock Skyrockets After Blockbuster OpenAI Deal – What It Means for Investors in 2025^[2].

This market ascent is a stark turnaround for a company that was worth under $2 billion in 2012 before CEO Dr. Lisa Su took the helm. AMD’s rise from underdog to industry heavyweight has been called “one of the most dramatic turnarounds in tech” AMD’s Stock Skyrockets After Blockbuster OpenAI Deal – What It Means for Investors in 2025^[2].