TLDR
- AMD stock jumped 34% in one day after announcing OpenAI and Oracle AI deals worth tens of billions
- Shares have climbed 90% year-to-date to $235 with Wall Street targets ranging from $250-$310
- AI revenue now represents 21% of total sales as datacenter demand accelerates
- Q2 revenue hit $7.69 billion, up 32% year-over-year with Q3 guidance at $8.7 billion
- Company faces competition from Nvidia’s 90% GPU market share but positions itself as open alternative
Advanced Micro Devices stock posted its biggest single-day gain since 2016 on October 6. Shares surged 34% after the company announced major AI partnerships with OpenAI and Oracle.
Advanced Micro Devices, Inc., AMD
The OpenAI deal covers GPU supply for 6 gigawatts of compute capacity. Oracle will deploy 50,000 next-generation Instinct GPUs under a separate agreement.
These contracts could generate tens of billions in annual revenue. Total cumulative sales may exceed $100 billion according to company projections.
The rally added roughly $80 billion to AMD’s market value in one trading session. Market capitalization now sits at approximately $380 billion, matching Intel’s valuation.
Shares briefly touched all-time highs around $238 in mid-October. The stock settled near $235 by late October.
Year-to-date gains of 90% far exceed the Philadelphia Semiconductor Index’s 32% rise. AMD has outperformed most chipmaker peers in 2025.
Wall Street Raises Price Targets
Bank of America lifted its 12-month target to $300 following the AI announcements. Jefferies and Wolfe Research matched that figure while HSBC went to $310.
Rosenblatt Securities maintained a $250 target with a Buy rating ahead of earnings. The firm expects beat-and-raise guidance based on server chip demand.
Roughly 60-65% of analysts now rate AMD as a Buy, up from 50% earlier this year. Morgan Stanley raised its 2027 revenue forecast to $51.2 billion from $44.2 billion.
Wedbush set a $270 target, estimating each gigawatt of AI capacity could generate $20 billion in sales. Goldman Sachs and Citigroup hold neutral ratings with $210 targets, citing stretched valuations.
The company reported Q2 revenue of $7.69 billion, a 32% year-over-year increase. Adjusted earnings per share came in at $0.48.
CEO Lisa Su guided Q3 revenue to $8.7 billion, representing 20% growth. Full-year 2025 sales targets now approach $33 billion.
Competition and Market Position
Nvidia dominates the datacenter GPU market with 90-94% share. Its recent quarter showed datacenter revenue of $39.1 billion, up 73%.
AMD’s datacenter revenue reached $3.2 billion with 14% growth in the same period. The gap between the two companies remains substantial.
Nvidia CEO Jensen Huang called the AMD-OpenAI deal “imaginative” but praised AMD as “a really good company” that Nvidia takes seriously.
Intel launched a new Crescent Island datacenter AI chip for 2026. The company secured CHIPS Act funding plus $7 billion from Nvidia and SoftBank.
AMD positions its GPUs, EPYC CPUs and Helios server racks as an open alternative to Nvidia’s closed systems. AI products now account for 21% of total revenue.
U.S. export restrictions will impact growth. AMD expects a $1.5 billion hit to 2025 sales from limits on AI chip shipments to China.
Leaked BIOS code revealed upcoming Strix Point APU development for Q4 2025. These processors combine CPU and GPU capabilities for laptops and budget systems.
AMD trades at 40x expected 2026 earnings with a trailing P/E above 100x. Analysts warn the valuation leaves little room for execution missteps.
The company reports Q3 earnings soon with an Analyst Day scheduled for November 11 to detail 2026 product plans.
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