Several analysts on Wall Street have boosted their price targets for Advanced Micro Devices (AMD) after the company announced an exciting partnership with OpenAI, the creator of ChatGPT. TD Cowen analyst Joshua Buchalter raised his target for AMD stock from $195 to $270, keeping a “Buy” rating. His positive outlook reflects optimism about AMD’s role in artificial intelligence (AI). So far, AMD stock has surged about 78% this year.
In this new partnership, OpenAI plans to use 6 gigawatts of AMD’s Instinct GPUs over several years. This agreement also includes a warrant for up to 160 million shares of AMD common stock, potentially granting OpenAI a 10% stake in the chipmaker.
Buchalter noted that while a collaboration between AMD and OpenAI wasn’t entirely unexpected—especially after Sam Altman spoke at an AMD AI event—the scale of the deal still took many by surprise. Despite believing AMD has more to prove with practical deployments, he thinks this partnership will help quell investor worries about the company’s AI strategy.
He views this deal as significant validation for AMD’s position in the competitive AI market, particularly against big players like Nvidia. However, Buchalter holds a neutral stance as AMD approaches its Q3 results. He acknowledges that, while AMD has solid fundamentals, the recent spike in stock prices might limit short-term catalysts.
According to Buchalter’s revised model, even under conservative estimates, AMD’s earnings per share (EPS) could approach $10 by 2027.
For context, Wall Street currently gives AMD a “Moderate Buy” rating based on 26 buy recommendations and 10 holds. The average price target sits at $239.15, suggesting around 11.3% upside from current levels.
This partnership comes at a time when interest in AI technology is skyrocketing. According to a recent survey by Gartner, 76% of executives say AI will significantly change their businesses in the next three years. As companies like AMD position themselves in this rapidly evolving market, industry experts highlight the importance of strategic partnerships to drive innovation and growth.
In summary, AMD’s partnership with OpenAI could redefine its trajectory in the semiconductor space, making it a firm to watch as the landscape of technology continues to shift.
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