AMD Stock Gains as Oracle Announces Major GPU Deployment

AMD's stock (NASDAQ:AMD) is trading more than 2% higher in pre-market following Oracle Cloud Infrastructure's (OCI) announcement of a significant deployment of AMD graphics processors. The move signals a growing trend of cloud companies offering AMD GPUs as viable alternatives to Nvidia's (NVDA) market-leading products, particularly in the rapidly expanding field of artificial intelligence.

The positive price action reflects investor confidence in AMD's ability to capture a larger share of the AI infrastructure market. Oracle's commitment to deploying 50,000 AMD graphics processors starting in the second half of 2026 is a tangible validation of AMD’s technology and its potential to meet the demands of high-performance computing environments. This deployment is a major milestone for AMD as it seeks to challenge Nvidia's dominance in the GPU space.

Oracle's decision highlights AMD’s competency in the inferencing space, an area crucial for AI applications. Beyond the Oracle deal, AMD recently entered into a multi-year agreement with OpenAI to supply AI chips, a deal potentially worth tens of billions of dollars in annual revenue.

This agreement includes an option for OpenAI to acquire up to 10% of AMD through warrants, contingent on specific milestones, indicating a strong alignment of interests and a long-term commitment. OpenAI's plans to build a one-gigawatt facility utilizing these chips, starting in 2026, further solidifies AMD's position as a key player in the AI infrastructure landscape. News of the OpenAI partnership previously triggered a surge in AMD shares, with a pre-market increase exceeding 23%.

Oracle is also expanding its AI infrastructure with plans to deploy AMD Instinct MI355X GPUs within its cloud environment. The forthcoming zettascale AI cluster is designed to scale up to 131,072 MI355X GPUs, offering a significant price-performance improvement compared to previous generations. This expansion aligns with Oracle's broader strategy to enhance its AI capabilities and cater to the increasing demand for high-performance computing resources.

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