This analyst just raised his price target on AMD to $250.00

Roth Capital Markets analyst Suji Desilva raised his 12-month target price on Advanced Micro Devices (Advanced Micro Devices Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMD) to US$250.00 from US$200.00 and maintained his “Buy” rating in an Oct. 6 company update, saying a landmark supply agreement with OpenAI significantly strengthens AMD’s position in large-scale AI infrastructure.

Santa Clara, Calif.–based AMD is a global semiconductor company operating through four segments: data center, client, gaming, and embedded.

AMD and OpenAI announced a definitive multi-year, multi-phase 6-gigawatt agreement for AMD AI processors and rack-based systems to power OpenAI’s next-generation infrastructure. Initial 1 GW deployments of AMD’s Instinct MI450 GPUs are expected to begin in the second half of 2026, with material revenue ramping into 2027.

OpenAI will use AMD’s rack-based Helios platforms for both training and inference workloads, deepening the companies’ existing collaboration that began with the MI300X and continued through the MI350X series.

Desilva called the OpenAI partnership a “watershed” moment for AMD’s AI roadmap, noting that phase one alone represents potential “healthy double-digit billions” in revenue, compared with his estimate of US$7.5-billion in total AMD AI revenue for calendar 2025.

He said OpenAI’s decision to adopt AMD’s GPU/CPU/DPU architecture reflects demand for more open, standards-based rack-scale solutions that can compete with custom ASIC offerings from the market leader.

As part of the agreement, AMD has issued OpenAI up to 160 million performance-based warrants, vesting over five years in tranches tied to deployment milestones and share-price targets. The first tranche will vest with the initial 1 GW deployment. Desilva said the warrant structure underscores the long-term, strategic nature of the partnership and could align the two companies’ interests over multiple product generations.

AMD chair and CEO Lisa Su said the deal “brings the best of AMD and OpenAI together to create a true win-win enabling the world’s most ambitious AI buildout and advancing the entire AI ecosystem.”

OpenAI co-founder and CEO Sam Altman added that AMD’s leadership in high-performance chips “will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster.”

Desilva said the agreement positions AMD as a credible alternative source of hyperscale AI compute and expects further large-customer announcements to follow.

“We are encouraged that AMD’s AI product roadmap is winning large-scale AI customers such as OpenAI as a competitive alternative to the AI market leader and customer ASIC solutions,” he said.

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