Advanced Micro Devices (NASDAQ:AMD) stock just went vertical – skyrocketing more than 30% – after the company unveiled a blockbuster, multi-billion-dollar partnership with OpenAI this morning. The agreement marks one of the most ambitious AI-hardware commitments to date, with OpenAI set to purchase 6 gigawatts of AMD chips, starting with the MI450X GPU, expected to ship in mid-to-late 2026.
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According to Wells Fargo’s Aaron Rakers, an analyst ranked in the 10th spot among the thousands of Wall Street stock experts, OpenAI’s CEO Sam Altman was already a prominent guest at AMD’s Advancing AI event earlier this year, and today’s news underscores how far that relationship has evolved.
Rakers emphasized the potential scale of this partnership, pointing out that industry references suggest “tens of billions” are typically spent per gigawatt of AI capacity. Based on those figures, the analyst said, the deal could easily push AMD’s non-GAAP EPS above what he had viewed as the targeted $7 per-share level. Rakers added that investor sentiment will likely zero in on AMD’s ability to reach $15 billion-plus in data-center GPU revenue by 2026, well above his current $10.7 billion estimate.
Under the agreement, OpenAI will also receive performance-based warrants to purchase up to 160 million AMD shares, representing roughly 10% of the company, if certain deployment and share-price milestones are met. According to reports, the warrants vest in stages tied to AMD’s rollout of the 6GW compute capacity and specific stock-price targets, with the final tranche linked to AMD shares reaching $600.
The first 1GW deployment is slated to begin in the second half of 2026, with additional tranches bringing the total capacity to 6GW. The Wall Street Journal reported that these chips will be used for inference, as the AI industry continues to face limited compute availability.
Rakers points out that OpenAI’s diversification toward AMD “further validates that the AI infrastructure buildout has room to run.” The 5-star analyst expects NVIDIA to remain the leader in model training, but sees AMD’s growing role in inference as a key driver of future growth.
To this end, Rakers assigns AMD shares an Overweight (i.e., Buy) rating, though today’s rally has already pushed the stock well past his $185 price target. (To watch Rakers’ track record, click here)
That’s Wells Fargo’s take, but what about the rest of Wall Street? Across the board, AMD has 22 Buys and 13 Holds, giving it a Moderate Buy consensus rating. Still, the average price target sits at $187.32, suggesting ~16% downside from where the stock is trading now. Expect those targets to get a round of updates in the days ahead. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.