AMD Stock Rallying, Price Target Moves to $300 on OpenAI Deal

Advanced Micro Devices (AMD) has seen its stock price surge following the announcement of a significant partnership with OpenAI, leading to a series of analyst upgrades and revised price targets, the latest of which is particularly bullish.

The market reacted positively, with AMD's stock closing up 23.71% in yesterday's session alone. This performance contributed to its YTD outperformance, with gains of 68.87% on the period.

At the heart of this surge is a multi-year agreement to supply AI chips to OpenAI. The deal involves the deployment of six gigawatts of AMD's forthcoming Instinct MI450 GPUs, with initial shipments expected in the second half of 2026. This partnership is projected to generate tens of billions in annual revenue for AMD.

Furthermore, OpenAI has been granted warrants to acquire up to 160 million AMD shares at a nominal price, contingent upon specific milestones, including the delivery of MI450 chips and AMD's stock reaching price targets up to $600 per share.

Wall Street Analysts Weigh In

The OpenAI partnership has spurred numerous financial analysts to revise their outlook on AMD's stock. Here's a summary of the key upgrades:

Jefferies upgraded AMD to “Buy” from “Hold,” significantly raising the price target from $170 to $300. Jefferies cited the OpenAI deal as a transformative event, validating AMD's AI roadmap and underscoring the robust demand for AI computing resources.

Barclays followed suit, raising its price target to $300 from $200, maintaining an “Overweight” rating and describing the partnership as mutually beneficial.

Stifel increased its price target to $240 from $190, emphasizing the deal's potential to position AMD as a co-design partner in OpenAI's infrastructure roadmap.

BofA Securities adjusted its price target to $250 from $200, highlighting the agreement's role in solidifying AMD's foothold in the AI sector.

UBS raised its price target to $265 from $210, viewing the partnership as a significant validation of AMD's strategic direction that could attract additional customers.

The AMD-OpenAI deal has reverberated across the technology sector. Nvidia, a major player in the AI chip market, experienced a slight decline of approximately 1% in its stock price, suggesting potential concerns about increased competition. Conversely, other AI-related stocks, including Marvell, Micron, Super Micro Computer, Palantir, and Oracle, saw notable gains, reflecting broader investor optimism in the AI sector.

The Asia trip, conducted by Jefferies, revealed potential share gains in server central processing units with Venice, further bolstering their positive outlook on AMD. This suggests that AMD is not only making strides in the AI hardware market but also strengthening its position in traditional server markets.