Advanced Micro Devices (NASDAQ: AMD) announced a multi-year deal with OpenAI on Monday, October 6, a move that could generate more than $100 billion in revenue for the chipmaker.
The agreement calls for AMD to support 6 gigawatts of data center capacity over several years, with the first 1 GW rollout set for the second half of 2026 using its MI450 GPUs and Helios rack systems.
As part of the partnership, AMD will also issue 160 million shares to OpenAI, roughly a 10% stake in the company, starting at $600 per share.
At the time of writing, AMD stock was trading at $204.70, up 26% on the weekly chart.
New AMD price targets
Understandably, analysts welcomed the deal with open arms. Mizuho, for instance, reiterated its “Outperform” stance with a $205 price target, citing revenue prospects as key drivers while cautioning that Nvidia (NASDAQ: NVDA) remains the dominant force in the industry.
At the same time, Bank of America highlighted the partnership as likely incremental to AMD’s existing Middle East agreements, with a “Buy” rating and a price target of $250.
Also bullish, UBS believes the 6GW commitment could help AMD secure as much as a third of merchant GPU deployments. Accordingly, it gave the company a “Buy” rating and a projected target of $265. Meanwhile, Evercore expects an earnings lift of more than $2 in 2027 and $4 in 2028, raising its price projection to $240 and giving it a “Buy” score.
Baird, with a “Buy” rating and a new projected price of $240, pointed to the competitiveness of AMD’s MI450 chips, suggesting the new contract could push AMD’s market share beyond 20% by 2027. With the same 12-month numbers, Stifel commented on the agreement as “earnings accretive.”
Will AMD hit $300?
The most optimistic projections came from Melius, Barclays, and Jefferies, all believing AMD shares will hit $300. Melius argued that despite dilution, 2027 EPS could climb 35% to $10, translating to $27 billion in AI revenue, while Jefferies upgraded the stock to “Buy” due to strong AI demand.
In other developments, Morgan Stanley raised its 2027 data center GPU revenue forecast from $13 billion to $20 billion. Cantor Fitzgerald and Truist also lifted EPS forecasts to $9.25 for 2027, with targets of $275 and $273, respectively.
Finally, Oppenheimer likewise acknowledged the deal would likely be lucrative, estimating more than $15 billion in revenue per gigawatt. Nonetheless, it maintained a “Neutral” position pending greater clarity on earnings contributions.
All in all, the average AMD stock price target for the next year sits at $215.59 based on a total of 35 ratings aggregated on the market analysis platform TipRanks. The figure implies a 5.83% upside potential from the current price.
Despite the overall positive outlook, however, some risk still remains, as is apparent from some analyst takes mentioned above. For instance, there is some uncertainty regarding chip packaging (CoWoS) and competition from custom ASICs.
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