AMD Shares Surge 43% in Three Days as Analysts Bet on OpenAI Deal to Shatter the Runner-Up Mold

TradingKey - A landmark equity-for-compute deal between AMD and OpenAI has prompted Wall Street to reassess the long-term prospects and competitive standing of this Nvidia challenger. In just one week, nearly 30 analysts updated ratings and price targets, sending AMD’s stock soaring 43% over three trading days.

On Wednesday, October 8, AMD shares closed up 11.37%, marking a three-day gain of 43% — on track for its largest weekly gain since April 2016.

The Strategic Deal That Changed Everything

Under the agreement announced Monday, OpenAI, the developer of ChatGPT, will deploy 6 gigawatts (GW) of AMD GPU computing power over the coming years. In return, AMD granted OpenAI a warrant to purchase up to 160 million shares — approximately 10% of AMD’s outstanding common stock.

Compared to AMD’s estimated $6.55 billion in AI GPU revenue for 2025, company executives said the OpenAI order could generate “tens of billions” of dollars in revenue and significantly boost earnings per share (EPS).

Wall Street Responds: A Flood of Upgrades

Since the announcement, 26 analysts have revised their views on AMD, highlighting the deal’s potential to:

• Unlock vast new growth
• Narrow the gap with chip leader Nvidia

Notable upgrades include:

• Barclays, Jefferies, and Melius Research set a $300 price target — the highest on Wall Street — implying over 27% upside
• The consensus target price is $221.49 (per TradingKey), suggesting about 5% upside from current levels

Investor Sentiment: Skepticism Meets Opportunity

Jordan Klein, analyst at Mizuho Securities, noted that many long-only fund managers remain skeptical and are hesitant to chase the rally. But he sees more catalysts ahead, including a key investor day in November.

“The near-term outlook looks solid,” Klein said. Instead of focusing on MI355 performance, investors should watch how fast AMD can launch the MI450 and achieve full deployment of the 6 GW OpenAI order.

Strategic Significance Beyond Revenue

Gimme Credit emphasized that the real story isn’t just the financial upside — it’s the strategic signal OpenAI is sending: diversifying its chip supplier base.

While it remains unclear whether Nvidia alone can meet OpenAI’s massive demand, the fact that OpenAI values AMD enough to take a 10% equity stake suggests strong confidence in its technology. This could encourage other AI firms to adopt AMD GPUs.

Even Nvidia CEO Jensen Huang praised the deal in a Wednesday interview:

“It’s imaginative, it’s unique and surprising, considering they were so excited about their next-generation product. I’m surprised that they would give away 10% of the company before they even built it. And so anyhow, it’s clever, I guess.”

Jefferies: $100+ Billion in Potential Revenue

Jefferies analysts upgraded AMD to “Buy”, projecting that the 6 GW of AMD chips deployed by OpenAI could generate over $100 billion in revenue for AMD over time.

They also pointed to OpenAI’s recent partnerships with Nvidia, Oracle, SK Hynix, and Samsung, noting that while these deals aren’t binding, they underscore the accelerating scale of AI infrastructure spending.

“While none of these deals are binding,” Jefferies said, “they highlight how large OpenAI views the need for AI compute.” Lots of details will need to be sorted out, but what is clear is that AI spending is accelerating even from here.