BofA Global Research raises AMD price objective to $250 from $200

BofA Global Research raises AMD price objective to $250 from $200

BofA Global Research has recently raised its price objective for Advanced Micro Devices (AMD) from $200 to $250, reflecting the positive market sentiment surrounding the company's strategic partnership with OpenAI. The new target, set on September 12, 2025, indicates a potential 20% increase in the stock price .

The partnership, announced on October 6, 2025, involves OpenAI deploying a massive 6 gigawatts (GW) of AMD GPUs across multiple generations of AMD Instinct™ graphics processing units. This deal is one of the largest GPU deployment agreements in the AI industry to date . The initial deployment of 1 GW of AMD Instinct MI450 Series GPUs is scheduled to commence in the second half of 2026, with subsequent purchases scaling up to the full 6 GW target.

The equity component of the deal is significant, with AMD issuing OpenAI a warrant for up to 160 million shares of AMD common stock. If OpenAI exercises the full warrant, it could potentially acquire approximately 10% ownership in AMD . The vesting of these shares is tied to performance milestones, including the initial 1 GW deployment and subsequent purchases scaling up to the full 6 GW. Vesting is also contingent upon AMD achieving certain share-price targets and OpenAI successfully realizing the technical and commercial milestones needed to enable large-scale AMD deployments.

The partnership has had a positive impact on AMD's stock price, with shares surging more than 35% post-announcement. According to Jean Hu, AMD's EVP, CFO, and Treasurer, the deal is expected to generate highly accretive revenues for AMD, contributing to non-GAAP earnings per share .

The deal also carries significant financial implications for OpenAI, which is rapidly morphing into one of the more aggressive infrastructure builders in AI. The partnership adds pressure on supply chains scattered across the industry and diminishes the risk of OpenAI putting all of its eggs into one basket.

The 6 GW deployment target is unprecedented, rivalling the total compute capacity of some national supercomputing programs, and signals OpenAI's intent to vertically integrate infrastructure at hyperscale. The equity-linked structure also reflects a shift in how compute partnerships are monetised, blending capital markets with infrastructure scaling, and potentially reshaping how AI firms negotiate hardware access amid global chip shortages and geopolitical constraints .