Why Is AMD Stock Surging Today?

Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) are trading higher Tuesday amid a flurry of positive analyst coverage. Here’s what you need to know.

What To Know: AMD received several positive analyst updates after the company struck a deal with OpenAI on Monday. Shares were up nearly 5% at last check, according to Benzinga Pro. Here’s a look at the analyst changes pushing shares higher on Tuesday.

• Benchmark raised its price target from $210 to $270 and maintained a Buy rating.
• Rosenblatt raised its price target from $200 to $250 and maintained a Buy rating.
• Morgan Stanley raised its price target from $168 to $246 and maintained an Equal-Weight rating.
• Jeffries raised its price target from $170 to $300 and upgraded the stock from a Hold to a Buy.
• Truist Securities raised its price target from $213 to $273 and reiterated a Buy rating.
• Wells Fargo lifted its target from $185 to $275 and maintained an Overweight rating.

AMD reached a deal with OpenAI to provide six gigawatts worth of GPUs to the company. The first delivery of AMD Instinct MI450 GPUs is expected in the second half of 2026.

AMD issued OpenAI a warrant for 160 million shares with vesting milestones based on commercial performance of the partnership as part of the deal. If the warrant is fully exercised, OpenAI could acquire close to a 10% stake in AMD.

"Our partnership with OpenAI is expected to deliver tens of billions of dollars in revenue for AMD while accelerating OpenAI's AI infrastructure buildout," said AMD CFO Jean Hu.

AMD will become OpenAI’s “core strategic compute partner,” as the companies will share technical expertise to optimize respective product road maps. GPUs are critical to artificial intelligence infrastructure, as they provide the computing power for the models to run on.

"This partnership is a major step in building the compute capacity needed to realize AI's full potential," said Sam Altman, CEO of OpenAI. "AMD's leadership in high-performance chips will enable us to accelerate progress and bring the benefits of advanced AI to everyone faster."

AMD Price Action: Shares of AMD were up 4.92% at $213.73 at the time of publication Tuesday, according to Benzinga Pro.

Read Next:

• AMD’s OpenAI Deal Could Spark A New AI Arms Race With Nvidia

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