AMD stock surges 34% as OpenAI commits to buying 6 GW of GPU chips and takes 10% stake in company.

AMD stock soars 34% to $220.44 after OpenAI announces a partnership to create new data centers powered by AMD's chips. OpenAI will buy six gigawatts of AMD GPU chips, with the initial deployment scheduled for 2026. AMD will also issue a warrant for as many as 160 million shares of AMD stock to OpenAI. The deal is a major step in building the compute capacity needed to realize AI's full potential, according to OpenAI CEO Sam Altman.

Advanced Micro Devices (AMD) stock experienced a significant surge of 34%, reaching $220.44, following the announcement of a strategic partnership with OpenAI. The deal involves OpenAI purchasing six gigawatts of AMD's GPU chips, with the initial deployment scheduled for 2026. Additionally, AMD will issue a warrant for up to 160 million shares of its stock to OpenAI, contingent on the achievement of specific milestones.

The partnership is a major step in building the compute capacity needed to realize AI's full potential, according to OpenAI CEO Sam Altman. This deal positions AMD as a key player in the rapidly expanding AI hardware market, underscoring the growing demand for high-performance compute solutions.

The AMD-OpenAI partnership is expected to generate substantial revenue for AMD. Analysts project that the deal could produce over $100 billion in revenue over several years, with each gigawatt deployed potentially generating double-digit billions in revenue.

The stock's performance has been bolstered by the positive outlook from leading analysts. Baird analyst Tristan Gerra raised his price target from $175 to $240, citing the competitive validation of AMD’s MI450 chips and the potential for the partnership to help AMD reach 20% market share in AI GPUs AMD Stock: OpenAI Partnership Drives Analyst Upgrades and 24% Rally^[1]. Stifel analyst Ruben Roy increased his target from $190 to $240, viewing AMD as becoming a co-design partner in OpenAI’s infrastructure plans. Roth Capital analyst Suji DeSilva boosted his target from $200 to $250, establishing AMD as a credible large-scale AI infrastructure provider capable of competing with Nvidia AMD Stock: OpenAI Partnership Drives Analyst Upgrades and 24% Rally^[1].

The partnership also adds to the existing multi-generational hardware and software collaboration between AMD and OpenAI, positioning AMD as a core supplier in the AI hardware market Advanced Micro Devices (AMD) Is Up 26.2% After Securing Major Multi-Year AI Chip Deal With OpenAI^[2]. This deal aligns closely with AMD's strategy in the high-performance AI accelerator market, where the company has been capturing share despite fierce competition.

The OpenAI deal is significant for AMD as it deepens its involvement in the AI infrastructure market, which is expected to grow rapidly in the coming years. The partnership positions AMD to capture a larger share of this market, potentially leading to increased revenue and market capitalization.