So AMD stock went absolutely bonkers yesterday, shooting up 24% faster than your crypto portfolio during a bull run. Why? Because they just landed the kind of deal that makes other chip companies weep into their silicon wafers.
Here’s the tea: OpenAI (yes, the ChatGPT folks) just handed AMD a massive contract to power their next-gen AI infrastructure. We’re talking 6 gigawatts of AI chips over time – that’s enough computing power to probably simulate the entire Marvel multiverse.
The Deal That Made Wall Street Do a Double-Take
AMD is getting tapped to deliver their shiny new Instinct MI450 GPUs, with the first gigawatt deployment hitting in late 2026. But here’s where it gets spicy – this isn’t just a “hey, sell us some chips” situation. OpenAI is literally getting skin in the game with up to 160 million AMD shares (that’s 10% of the company, folks).
Think of it like this: instead of just being a customer, OpenAI is becoming AMD’s business partner with benefits. The equity deal vests as milestones get hit – kind of like a relationship status that updates based on how well things are going.
Why This Matters (Beyond Making AMD Shareholders Rich)
For years, NVIDIA has been the cool kid at the AI chip party, basically owning the playground while everyone else fought for scraps. OpenAI has been one of NVIDIA’s biggest cheerleaders, recently signing a deal for 10 gigawatts of their GPUs.
But smart companies don’t put all their eggs in one basket – even if that basket is as shiny as NVIDIA’s. This AMD partnership is OpenAI’s way of saying “we need options” while diversifying their supply chain. It’s like dating multiple people but making it official with one of them.
The Numbers Game
AMD’s CEO Lisa Su is probably doing victory laps right now, and rightfully so. This deal is expected to bring “tens of billions” in revenue over time. AMD stock has already been having a stellar year (up 68% before this news), and analysts are now throwing around price targets that would make a lottery winner jealous.
We’re seeing upgrades left and right: Melius and Barclays both bumped their targets by $100 to $300 per share, while others are predicting 18% to 47% upside from current levels.
The Bottom Line
This isn’t just another tech partnership announcement. It’s AMD finally getting a seat at the big kids’ table in the AI chip wars. While NVIDIA stock took a small hit (down 1%), AMD is basking in the glory of landing one of the most important AI companies as both a customer AND a business partner.
For investors, this represents AMD’s best shot at breaking NVIDIA’s stranglehold on the AI chip market. For the rest of us? It means the AI revolution just got a little more competitive – and that’s usually good news for innovation and pricing.
Now excuse me while I go check if my AMD calls are printing money…