Advanced Micro Devices (AMD, Financials) is having a breakout moment. The chipmaker’s stock jumped after announcing a major partnership with OpenAI a deal that could redefine AMD’s place in the race to power artificial intelligence.
Under the agreement, AMD will supply advanced chips designed to handle OpenAI’s massive computing needs, offering an alternative to Nvidia’s widely used processors. The company expects its AI data center business to generate double-digit billions in annual revenue by 2027, signaling how central AI has become to its growth plans.
For investors, it’s a big validation of AMD’s strategy. The stock has nearly doubled since May as excitement around AI spreads across the semiconductor sector. Analysts have responded by raising their 2026 and 2027 forecasts, saying AMD is now well-positioned to grab a bigger share of the AI server market.
There are still challenges fierce competition, high costs, and the ups and downs of chip demand but the OpenAI partnership gives AMD a strong foothold in one of tech’s fastest-growing areas. The company’s next earnings call is expected to give more detail on how the deal will roll out and what it could mean for profits.
