Advanced Micro Devices, Inc. (NASDAQ:AMD) stands out as one of the AI Stocks Making Waves. On October 7, analyst Harsh Kumar from Piper Sandler updated the stock’s price target to $240, previously $190, maintaining an Overweight rating on the shares.
This adjustment in price target comes on the heels of a significant collaboration between AMD and OpenAI, which involves a substantial agreement of 6 gigawatts to support OpenAI’s AI infrastructure utilizing AMD’s Instinct GPUs.
As part of this partnership, OpenAI will receive 160 million warrants for AMD shares contingent on reaching specific benchmarks over the next five years. The firm anticipates that AMD will initiate shipments of Pensando’s UALink switches alongside the MI500 chip by 2027.
“This initial agreement encompasses a wide array of components, including GPUs, CPUs, DPUs, and some licensing revenue from the Helios rack. AMD forecasts that each gigawatt deployed could result in high double-digit billions in annual revenue. We also expect AMD to start delivering Pensando’s UALink switches alongside the MI500 chip in 2027. This partnership hints at the strong potential for AMD’s Instinct accelerators to be widely adopted not only by OpenAI but also by its selected cloud service provider partners. We believe this will likely pave the way for significant interest from additional players in the future. We reiterate our OW rating and have increased our price target to $240.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) designs and markets semiconductors, processors, and GPUs targeting data centers, gaming, AI, and embedded systems.
While we recognize AMD’s investment potential, we believe other AI stocks present a more compelling upside while minimizing downside risks. For investors seeking an undervalued AI stock poised to gain from Trump’s tariffs and the trend of onshoring, view our complimentary report on the best short-term AI stock.
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