AMD Stock Price Forecast: AMD Acquires World Labs for $8.2 Billion, Stock Expected to Rise to $732

TradingKey - As of September 28 Eastern Time, AMD (AMD) stock pulled back on Monday after hitting an all-time high of $639 last Friday, dropping 3.61% during the session to close at $607.87. However, the company's latest AI acquisition has once again become a focus of market attention. On September 28, AMD announced that it would acquire World Labs, founded by Fei-Fei Li, in an all-stock transaction valued at approximately $8.2 billion, further extending its reach from AI chips into AI models, software, and physical AI.

$8.2 Billion World Labs Acquisition: AMD Doubles Down on Physical AI and World Models

According to official announcements from AMD, the company has entered into a definitive acquisition agreement with World Labs. The transaction is valued at approximately $8.2 billion and will be paid entirely in stock, with completion expected by the end of 2026 following regulatory approvals. World Labs is led by AI scientist Fei-Fei Li and focuses on research into "world models" and spatial intelligence technologies, enabling AI to understand, generate, and simulate 3D physical environments. Upon completion of the transaction, Fei-Fei Li will join AMD as Executive Vice President and Chief Scientist, reporting directly to CEO Lisa Su.

This transaction further expands AMD's AI footprint. Unlike traditional large language models that primarily process text, World Labs' technical focus is on enabling AI to understand spatial, object, and motion relationships in the real world, which can be applied to fields such as robotics, autonomous driving, industrial simulation, and 3D content generation. AMD and World Labs had previously collaborated on GPU model training and inference optimization, so this acquisition does not start entirely from scratch.

From AMD's strategic perspective, the company previously competed with Nvidia (NVDA) primarily through its Instinct GPUs, EPYC CPUs, and related software ecosystem, while acquiring World Labs means its AI strategy extends further into the model layer. AMD can leverage World Labs' understanding of computational demands for next-generation AI models to inform GPU, CPU, and overall AI system design, which is also the main difference between this transaction and simply acquiring a software company.

However, the $8.2 billion price tag also means AMD will bear higher integration costs and equity dilution pressure. World Labs is still in a phase of heavy investment, and the commercial scale of world models and physical AI has not yet reached the maturity of the traditional data center AI market. Therefore, whether this acquisition can translate into revenue growth still depends on the actual speed of future rollout for applications like robotics and spatial computing. The market's initial reaction has been relatively mild, with AMD rising 0.4% in after-hours trading following the announcement, showing no obvious repricing yet.

AMD Stock Price Technical Analysis

AMD daily stock price chart, Source: TradingView

Looking at AMD's daily stock price chart, the share price surged 9.95% in a single day on September 21 to $615.52, and subsequently hit an all-time high of $639 on September 25. However, the stock experienced a noticeable pullback on September 28, touching an intraday low of $596.07 before closing at $607.87, indicating that short-term resistance has formed around $639.

Currently, as the stock price breaks out and stabilizes above $620, the upside path toward $666 has been opened. If the stock can strongly break through and hold above this level, it will further open up upside potential toward $732.

On the downside, the first key support level to watch is $584, which is also near the 10-day moving average and could form confluent support. If this level is lost, the stock price may move further down to fill the September 19 gap around $560, below which lies support from the 20-day moving average.