AMD Stock Surges as OpenAI Deal Fuels Optimism Among Analysts

Advanced Micro Devices shares rallied 24% after securing a multiyear agreement to supply OpenAI with up to 6 gigawatts of GPU capacity. The partnership, which includes a warrant for 160 million AMD shares tied to performance milestones, signals growing confidence in the chipmaker's AI capabilities.

Baird's Tristan Gerra raised his price target to $240, citing industry validation of AMD's MI450 chips. The analyst predicts these processors could capture 20% or more of the AI GPU market by 2027, with multiple hyperscale customers evaluating adoption.

The deal underscores how AI infrastructure demands are reshaping semiconductor valuations. AMD's pre-market gains extended Tuesday's rally as investors bet on its ability to compete in the high-stakes AI accelerator market.