Street Calls of the Week
Investing.com - BofA Securities has reiterated its Buy rating and $250.00 price target on AMD (NASDAQ:AMD), currently trading near its 52-week high of $235.87 with a remarkable 38.79% surge in the past week. The rating follows an investor call with the company’s CFO Jean Hu and VP of Financial Strategy and IR Matthew Ramsay. According to InvestingPro analysis, AMD appears overvalued at current levels, despite showing GREAT overall financial health.
The firm noted that OpenAI’s first 1GW deployment is on schedule to ship in the second half of 2026 using AMD’s MI450 Series racks, with deliveries concentrated toward the fourth quarter of that year.
AMD’s content in the deployment will initially include GPUs, CPUs, and DPUs, representing approximately $15-20 billion per gigawatt, including the impact of contra-revenue warrants which BofA indicates will be less than 5%.
The semiconductor company will ship to and bill cloud service providers directly for the deployment, with BofA suggesting this arrangement could lead to additional AMD-based deployments at these providers.
BofA also highlighted that OpenAI is financially incentivized to deploy all 6 gigawatts before October 2030 when the warrants expire, and noted that AMD’s UALink technology builds on its existing null Fabric architecture developed over multiple generations.
In other recent news, Advanced Micro Devices (AMD) has announced a strategic partnership with OpenAI, which is expected to significantly impact its future revenue. This multi-year agreement involves AMD supplying GPUs to OpenAI’s data centers, potentially generating over $100 billion in AI revenue. The collaboration includes the deployment of 6 gigawatts of AMD’s GPU hardware, with the initial 1 gigawatt deployment set for the second half of 2026. In response to this partnership, several analyst firms have adjusted their price targets for AMD. Piper Sandler increased its price target to $240, maintaining an Overweight rating, while Baird also raised its target to $240, citing the potential for AMD to gain AI GPU market share. Bernstein SocGen Group adjusted its price target to $200, maintaining a Market Perform rating. Meanwhile, Goldman Sachs kept its Neutral rating with a price target of $210. These developments underscore the positive outlook analysts have regarding AMD’s partnership with OpenAI.
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