AMD's Partnership with OpenAI: Barclays Raises Price Target to $300

Barclays raised its price target on AMD to $300 from $200, citing the potential upside from its partnership with OpenAI. The firm estimates the deal will add $4.5 billion in quarterly revenue and lift earnings per share by $1.30. Barclays believes one gigawatt of new capacity will be deployed starting in 2026, adding $15 billion in revenue by 2027 if growth is sustained through 2030.

Barclays has significantly increased its price target for Advanced Micro Devices (AMD) to $300, up from $200, following the company's partnership with OpenAI. The investment bank estimates that the deal could add $4.5 billion in quarterly revenue and boost earnings per share by $1.30. Barclays projects that one gigawatt of new capacity will be deployed starting in 2026, potentially adding $15 billion in revenue by 2027 if growth is sustained through 2030 AMD Stock Gets Buy Rating From BofA Following OpenAI Partnership^[1].

The OpenAI partnership, which involves the deployment of AMD's MI450 Series racks, is expected to be a substantial driver for AMD's growth. According to the analyst, the deal could represent a significant opportunity for AMD, potentially adding up to $90 billion in revenue over the life of the contract. This deal is particularly notable as it involves the supply of GPUs, CPUs, and DPUs directly to cloud providers, a new channel for AMD that could lead to additional projects across the industry Should You Buy Advanced Micro Devices (AMD) Stock After Its Blockbuster Deal With OpenAI?^[2].

AMD's financial performance has been strong, with the company reporting a record $7.7 billion in total revenue during the second quarter of 2025, with its data center business contributing $3.2 billion. The company's data center segment has seen significant growth, with revenue up 146% year-over-year from Q2 2023 to Q2 2025. The OpenAI deal is expected to further accelerate this growth, particularly as the company deploys six gigawatts of computing capacity by October 2030 Should You Buy Advanced Micro Devices (AMD) Stock After Its Blockbuster Deal With OpenAI?^[2].

However, there are some considerations for investors. The deal includes warrants that represent less than 5% of the total value, but the potential dilution for shareholders could be significant if the terms are fully realized. OpenAI has the right to purchase up to 160 million AMD shares at $0.01 per share, which could be worth up to $96 billion if all milestones are met Should You Buy Advanced Micro Devices (AMD) Stock After Its Blockbuster Deal With OpenAI?^[2].

In summary, Barclays' raise in the price target for AMD is driven by the potential upside from the OpenAI partnership. The deal is expected to significantly boost AMD's revenue and earnings, with the potential for substantial growth in the coming years. However, investors should be mindful of the potential dilution from the warrants included in the deal.