AMD Soars 25% on OpenAI AI Chip Partnership Deal

The catalyst behind AMD’s dramatic 25% surge—adding $42.77 per share to reach $207.44—was the announcement of a long-term deal making AMD a key supplier to OpenAI’s AI infrastructure program. The partnership involves OpenAI deploying 6 gigawatts worth of AMD Instinct graphics processing units (GPUs) over the course of the collaboration, with the first 1 gigawatt deployment scheduled to begin in the second half of 2026. For context, as reported by Barron’s, one nuclear reactor typically generates one gigawatt of electricity, highlighting the massive scale of this GPU deployment.

AMD stated that this partnership will allow it to generate billions of dollars in annual revenue and over $100 billion in total revenue from chips over the next few years. The immediate market reaction was overwhelming, with intraday volume surging to 136.4 million shares compared to its daily average of 53.4 million, indicating intense investor interest in what analysts are calling a transformative deal for the semiconductor company.

Following the partnership announcement, Barclays analysts raised their price target on AMD by $100 to $300, describing the deal as ‘designed to be mutually beneficial to OpenAI and AMD, and more pointedly drive the stock higher.’ This significant price target increase reflects growing confidence in AMD’s positioning within the competitive AI chip market and its ability to capitalize on the expanding AI infrastructure build-out.

Wedbush analysts echoed this optimism, calling the partnership a ‘major movement in AI revolution’ and stating that ‘this is yet another validation sign that the AI Arms Race is heating up among Big Tech firms with AMD now joining the AI party.’ The analysts emphasized that the deal brings AMD CEO Lisa Su and her company ‘right into the core of the AI chip spending cycle’ and represents ‘a huge vote of confidence from OpenAI and Altman.’ They concluded that ‘any lingering fears around AMD should now be thrown out the window as this gives them a major platform to monetize the AI Revolution.’

AMD’s recent financial performance provides a solid foundation for this AI-driven optimism. In its most recent quarter, the company reported revenue of $7.69 billion, beating expectations of $7.43 billion. While adjusted EPS of 48 cents missed by a penny, the company demonstrated robust growth across key segments. Data center segment revenue reached $3.2 billion, up 14% year-over-year, while client and gaming segment revenue hit $3.6 billion, representing a 69% year-over-year increase.

AMD Chair and CEO Dr. Lisa Su commented on the results, stating, ‘We delivered strong revenue growth in the second quarter, led by record server and PC processor sales. We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing EPYC and Ryzen processor share gains.’ The company’s next earnings report is scheduled for Tuesday, November 4, 2025, providing investors with another opportunity to assess AMD’s progress in capitalizing on AI demand.

The timing of AMD’s OpenAI partnership aligns perfectly with the explosive growth projected for the global AI market. According to Grand View Research, the AI boom could grow from approximately $137 billion in 2022 to more than $1.81 trillion by 2030. This massive expansion creates substantial opportunities for semiconductor companies like AMD that can provide the necessary computing power for AI applications.

The Marketing AI Institute highlights the transformative potential of artificial intelligence, noting that AI will ‘on average, boost rates of profitability by 38% and provide an economic boost of $14 trillion in additional gross value by 2035, according to research by Accenture.’ MIT Technology Review adds perspective on the rapid pace of AI development, stating that ‘artificial intelligence is changing the world and doing it at breakneck speed’ with experts predicting ‘a 50 percent chance that AI will be better than humans at more or less everything in about 45 years.’ For AMD investors, the OpenAI partnership represents a strategic position at the forefront of this technological revolution.