AMD surges over 30% on major OpenAI deal for AI chips and strategic partnership​

Transformational deal reframes AMD's AI positioning

​The dramatic more-than 25% leap in Advanced Micro Devices' (AMD) share price in pre-market trading today - up around 37% at the official open - can largely be traced to a breakout announcement that reframes its role in the accelerating AI infrastructure race. Early this morning, AMD revealed that it has secured a significant, multi-year supply deal with OpenAI.

​Under this agreement, AMD will deliver AI chips and provide an option for OpenAI to take up to a 10% stake via warrants, creating a strategic alignment beyond a typical supplier-customer relationship.

​The core of the agreement involves OpenAI deploying AMD's upcoming Instinct MI450 graphics processing units (GPUs) across a roadmap that would scale to about six gigawatts of processing power, beginning with a one-gigawatt deployment in the second half of 2026.

​The deal is being framed not as a one-off order but as a foundational partnership with the potential to generate "tens of billions" in revenue over time.

​Warrant structure aligns long-term interests

​Crucially, the warrant structure gives OpenAI the right (subject to milestones) to acquire up to 160 million shares of AMD - roughly 10% of the float - at extremely favourable terms, which could further align their incentives as the agreement is executed.

​This innovative financial structure creates a deeper partnership than traditional supply agreements, with OpenAI's potential equity stake providing strong incentives for successful execution.

​The milestone-based nature of the warrants ensures that AMD must deliver on its promises before OpenAI exercises its right to acquire the substantial equity position.

​This alignment of interests through equity participation represents a new model for chip supplier relationships in the AI infrastructure space.

​Market validation of AI strategy

​Investor reaction to the news was explosive. The market is treating the deal as a validation of AMD's AI ambitions and a signal that it may close the gap with dominant players like Nvidia in the race for compute infrastructure.

​The promise of structural, recurring revenue from AI and expanded influence over the AI stack shifts AMD's positioning from a chip supplier to a strategic partner in AI network builds.

​This transformation in market perception reflects growing confidence that AMD can compete effectively in the highest-value segments of AI infrastructure rather than being relegated to secondary positions.

​The stock's dramatic surge demonstrates how significant strategic partnerships can rapidly alter investor sentiment and valuation frameworks.

​Building momentum preceded announcement

​But it's not just the headlines. Underlying momentum had already been building among analysts who increasingly discount AMD's ability to capture more share in data centre GPUs, especially as demand for inferencing (rather than just model training) grows.

​Some forecasts had already begun projecting more aggressive growth from AMD's AI platform business, making today's announcement feel like a breakthrough rather than a bolt from the blue.

​Moreover, the broader macro and sector sentiment is favourable. AI and chip stocks have been rallying ahead of regulatory clarity, and recent gains in semiconductors have fed momentum into individual names like AMD.

​The federal government shutdown concerns and nervousness elsewhere have also driven flows toward high-conviction growth stories, adding fuel to the rally.

​Execution risks temper enthusiasm

​Of course, some caution is warranted. The deal with OpenAI hinges on execution and meeting ambitious milestones that span multiple years and require significant technological and operational achievements.

​The warrants are contingent on AMD achieving certain deployment, pricing, and share price targets, creating performance hurdles that must be cleared.

​The growth periods span into 2026 and beyond, so this is as much a bet on future execution as it is on present strength and current capabilities.

​And while the market is bidding up the stock today, much of the optimism is now priced in - any missteps, revenue delays, or cost overruns could invite sharp reversals.

​AMD analyst rating and technical analysis

​Even before today’s announcement, TipRanks had a Smart Score of ‘9 Outperform’ with a ‘buy’ rating for AMD. 

AMD TipRanks Smart Score chart

​The AMD share price - up around 30% from Friday’s close - came very close to its March record high at $227.30 by rising to $226.66 before giving back some of its sharp gains.

​AMD weekly candlestick chart

​The March all-time high at $227.30 creates a formidable barrier which needs to be exceeded for the $250.00 region to be pushed to the fore. As long as this isn’t the case, more of Monday’s large $213.27-to-$171.06 price gap is likely to get filled in.

​Strong support sits between the January and July 2024 highs and the August 2025 peak at $287.28-to-$184.92. This support area may not even be reached, though, before further bullish momentum takes the AMD share price to new highs.

​The psychological $200.00 support region should thus also be watched as it may hold any potential short-term slip. This may also not be reached, though, as it would mean a decline of around 6% from current levels.

​Investment implications for semiconductor sector

​For investors considering AMD following this transformational announcement, the company now presents a materially different investment proposition than before the OpenAI deal.

1. ​Research AMD's AI strategy, competitive positioning versus Nvidia, and the technical capabilities of the Instinct MI450 platform to understand the opportunity.
2. ​Consider how execution risks, milestone achievement, and competitive dynamics might affect the deal's ultimate value creation.
3. ​Open an account with IG by visiting our website and completing the application process.
4. ​Search for 'Advanced Micro Devices' or its ticker 'AMD' on our trading platform or app.
5. ​Implement appropriate risk management given the high volatility typical of semiconductor stocks and the binary nature of major strategic partnerships.

​Spread betting and CFD trading provide flexible approaches for trading AMD, allowing positions on both rising and falling prices.

​For longer-term investors who believe in AMD's AI infrastructure opportunity, share dealing offers direct ownership in what could become a defining partnership.

​AMD's precipitous rise today reflects more than mere speculation. The OpenAI tie-up injects a narrative of long-duration growth, reinforces the company's AI credentials, and gives investors a more concrete reason to believe in future upside.