Advanced Micro Devices (AMD) stock surged 35% on Monday after announcing a strategic partnership with OpenAI that involves deploying up to 6 gigawatts of AMD’s graphics processing units (GPUs). This deal includes a warrant, potentially granting OpenAI a 10% stake in AMD, underscoring the escalating collaborations within the AI industry, particularly amid a recent $100 billion investment in Nvidia (NVDA) by OpenAI.
The agreement is pivotal for AMD, validating demand for its next-gen Instinct products and alleviating concerns about competing with Nvidia in the AI chip sector. Initially, OpenAI will deploy 1 gigawatt of AMD Instinct MI450 GPUs in late 2026. This partnership aims to enhance large-scale deployments, reinforcing AMD’s market position.
With a current Moderate Buy consensus rating from analysts, AMD’s stock target of $187.32 signals 14% upside potential, likely prompting revisions following this landmark collaboration.
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