AMD Turns Wall Street, Retail Traders Ultra-Bullish After OpenAI GPU Deal Sends Stock Rocketing: ‘Major Validation Moment’

Advanced Micro Devices, Inc. (AMD) shares had their best day in six months on Monday after OpenAI, the maker of ChatGPT, announced a deal to source six gigawatts (GW) of GPUs from the chipmaker. Following the agreement, Wall Street analysts got more bullish on AMD stock. 

Jefferies analysts upgraded AMD stock to ‘Buy’ from ‘Hold,’ and raised the price target to $300 from $170, according to a summary of the note on The Fly. The new price target implied roughly 45% upside from its closing price on Monday, when it jumped nearly 24% to $203.71 and closed at its highest level since March 2024. The analysts attributed the upgrade to AMD’s multi-generational opportunity with OpenAI and the firm’s positive server checks. 

Jefferies analysts stated that the OpenAI deal altered AMD’s “AI narrative” and provided “strong validation” of its AI roadmap and the level of AI demand in general. The research firm said it came away from its Asia trip incrementally positive on AMD due to potential gains in server share with its upcoming sixth-generation EPYC Venice server processor. 

Analysts at Melius Research and Stifel also increased their respective price targets for AMD stock, with Stifel raising its target to $240 from $190 and Melius increasing its target to $300 from $200. Both research firms have ‘Buy’ ratings on the stock. Stifel analysts view the deal as positioning AMD as a co-design partner in OpenAI’s infrastructure roadmap, thereby elevating the Lisa Su-led company’s perceived positioning in the AI compute and rack-scale systems market. Stifel noted that AMD’s management hinted that more such deals are in the works.

Melius analyst Ben Reitzes said the OpenAI deal was about five times better than he had expected. The analyst believes that a successful mass deployment with OpenAI will likely bring more hyperscale customers. Reitzes expects ratable dilution from the reflection of 160 million incremental shares from the second half of 2026 through 2030, resulting from the warrants AMD issued to OpenAI. If OpenAI exercises the full warrants, it could end up owning a 10% stake in AMD.

Reizes, however, sees the financial benefits to AMD as significantly accretive, as he estimates that deployment would translate to AI revenue of $17 billion to $20 billion, driving incremental operating income of $9 billion.  Despite factoring in the stock dilution, the firm raised its 2027 earnings per share (EPS) estimate by 35% to $10.00, including AI revenue of $27 billion.

In an X post, Wedbush analyst Daniel Ives said, “With a 10% stake in AMD, this quickly brings Lisa Su and AMD right into the core of the AI chip spending cycle and is a huge vote of confidence from OpenAI and Altman.” “Any lingering fears around AMD should now be thrown out the window. Major validation moment for AMD.”

On Stocktwits, retail sentiment toward AMD turned to ‘extremely bullish’ by late Monday from ‘bullish’ the day before. The message volume on the stream was at ‘extremely high’ levels. The message volume surged nearly 3850% over the 24 hours leading up to late Monday. The stock was the top trending equity ticker on the platform.

A bullish watcher said they see the stock easily doubling from its current levels and touching $400 or higher by 2027.

Another user said $250 could be incoming for the stock.

AMD stock has gained approximately 69% year-to-date, significantly outpacing the gains in the benchmark S&P 500 and Nasdaq indexes. In the after-hours session, the stock gained over 1.60%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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