Advanced Micro Devices (AMD) recently signed a major agreement with OpenAI to deliver up to 6 gigawatts of AI infrastructure, which analysts at Piper Sandler say could bring long-lasting benefits to the chipmaker. In return, OpenAI will receive 160 million warrants for AMD stock as it hits certain milestones over the next five years. The deal covers GPUs, CPUs, DPUs, and licensing revenue from AMD’s Helios rack. Interestingly, Piper Sandler noted that each gigawatt deployed could generate tens of billions in annual revenue, and AMD is expected to ship Pensando’s UALink switches with its MI500 chip in 2027.
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Following the announcement, Piper Sandler reaffirmed its Buy rating on AMD and raised its price target from $190 to $240. Five-star analyst Harsh Kumar and Robert Aguanno explained that this partnership not only creates immediate demand for AMD’s chips but also cements its role in the fast-growing AI infrastructure space. By securing such a large-scale deal, AMD is positioning itself as a key player alongside industry leaders.
Looking at the financial impact, Piper Sandler expects revenue from the deal to begin in the second half of 2026, with modest results in Q3, stronger growth in Q4, and a full ramp-up in 2027. In addition, management estimates that the partnership could generate more than $100 billion in revenue through October 2030 by serving both existing and new customers. The analysts added that this agreement should help AMD expand its profit margins and drive earnings-per-share growth.
Is AMD Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMD stock based on 36 Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 200% rally in its share price over the past year, the average AMD price target of $384 per share implies 17% upside potential.
