Advanced Micro Devices has signed a multi-year agreement to supply AI accelerators to OpenAI, representing one of the largest deals the company has ever announced. Under the terms, AMD will deliver hundreds of thousands of its latest data center GPUs, and OpenAI holds a warrant enabling acquisition of up to 10% of AMD’s equity if performance milestones are achieved. This partnership validates AMD’s ability to compete for hyperscale AI workloads previously dominated by a single vendor.

For the third quarter of fiscal 2025, AMD reported revenue of $9.25 billion, a 35.6% year-over-year increase driven by both compute and graphics segments. Gross margin recovered to 51.7%, up from 49.2% in the same period last year, reflecting higher selling prices and improved manufacturing yields. Data center sales rose by more than 50%, underscoring the accelerating contribution of AI-optimized products to the company’s top line.

Wall Street analysts maintain a constructive view on AMD, with 40 out of 51 surveyed firms rating the stock as Buy or Strong Buy. The consensus target price represents approximately a 14% premium to current levels, based on a forward P/E of 41x versus peers at 24x. Piper Sandler highlights the ramp of the Helios cluster and growing hyperscaler demand as key catalysts for continued outperformance in 2026.

Management forecasts AI data center revenue growth at an 80% compound annual rate over the next three years, double the broader market’s 40% annual expansion. With new GPU families (MI450x/MI455) and third-generation EPYC CPUs set to launch this year, AMD is targeting double-digit market share gains among hyperscalers such as Oracle, Meta and OpenAI. If executed successfully, these initiatives could support earnings growth north of 50% annually and position the company for a multibillion-dollar AI business run-rate by 2027.