AMD Surges Amid OpenAI Deal, Analysts Raise Price Targets
ByAinvest
Wednesday, Oct 8, 2025 5:07 pm ET1min read
AMD--
The partnership, which involves deploying AMD's next-generation Instinct MI450 Series GPUs, signals a profound confidence in AMD's current products and future roadmap. This agreement is expected to generate tens of billions of dollars in revenue for AMD over its lifetime and will be highly accretive to non-GAAP earnings per share (EPS), signaling a direct and significant boost to future profitability [1].
The partnership also includes a warrant allowing OpenAI to acquire up to 160 million AMD shares, with vesting tied to purchasing milestones and ambitious share-price targets. This structure effectively turns OpenAI into a long-term partner with a vested financial interest in AMD’s success [1].
The OpenAI deal follows AMD's strong performance in its core businesses, with the Client and Gaming segment delivering a stunning 69% year-over-year revenue increase in the second quarter of 2025. Additionally, AMD has achieved 33 consecutive quarters of server market share gains with its EPYC processors, demonstrating operational excellence and providing the capital to invest aggressively in future technologies [1].
The partnership has strategic implications for AMD, positioning it as a key architect of the AI future and solving its biggest challenges in the AI market. This move shifts the market dynamic from a near-monopoly to a competitive duopoly, unlocking new opportunities for AMD with other hyperscalers and large enterprises [1].
In response to the news, analysts have raised their price targets for AMD, with several top-tier firms significantly increasing their estimates. For example, Barclays and Jefferies have set their price targets at $300, while Benchmark has set its target at $270, and Morgan Stanley has set its target at $246. The consensus view on Wall Street is now Moderate Buy, with an average price target of $236.31, implying modest upside from current levels [1].
The trading volume for AMD shares spiked on September 12, 2025, as investors reacted to the news and upbeat analyst revisions. This surge in volume underscores the significant market interest in AMD's strategic partnership with OpenAI and its potential to drive long-term growth.
AMD shares surge 36% after announcing a partnership with OpenAI, with analysts raising price targets to between $240 and $300. The consensus view on Wall Street is now Moderate Buy, with an average price target of $236.31, implying modest upside from current levels. Trading volume spikes as investors react to the news and upbeat analyst revisions.
Advanced Micro Devices (AMD) shares surged 36% on September 12, 2025, following the announcement of a strategic partnership with OpenAI. The deal, which includes a commitment to deploy up to 6 gigawatts of AMD's GPU computing power, has significantly boosted investor confidence in the company's long-term prospects.The partnership, which involves deploying AMD's next-generation Instinct MI450 Series GPUs, signals a profound confidence in AMD's current products and future roadmap. This agreement is expected to generate tens of billions of dollars in revenue for AMD over its lifetime and will be highly accretive to non-GAAP earnings per share (EPS), signaling a direct and significant boost to future profitability [1].
The partnership also includes a warrant allowing OpenAI to acquire up to 160 million AMD shares, with vesting tied to purchasing milestones and ambitious share-price targets. This structure effectively turns OpenAI into a long-term partner with a vested financial interest in AMD’s success [1].
The OpenAI deal follows AMD's strong performance in its core businesses, with the Client and Gaming segment delivering a stunning 69% year-over-year revenue increase in the second quarter of 2025. Additionally, AMD has achieved 33 consecutive quarters of server market share gains with its EPYC processors, demonstrating operational excellence and providing the capital to invest aggressively in future technologies [1].
The partnership has strategic implications for AMD, positioning it as a key architect of the AI future and solving its biggest challenges in the AI market. This move shifts the market dynamic from a near-monopoly to a competitive duopoly, unlocking new opportunities for AMD with other hyperscalers and large enterprises [1].
In response to the news, analysts have raised their price targets for AMD, with several top-tier firms significantly increasing their estimates. For example, Barclays and Jefferies have set their price targets at $300, while Benchmark has set its target at $270, and Morgan Stanley has set its target at $246. The consensus view on Wall Street is now Moderate Buy, with an average price target of $236.31, implying modest upside from current levels [1].
The trading volume for AMD shares spiked on September 12, 2025, as investors reacted to the news and upbeat analyst revisions. This surge in volume underscores the significant market interest in AMD's strategic partnership with OpenAI and its potential to drive long-term growth.
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