AMD Stock: Rally Continues as AI Deals Push Shares To All-Time Highs
TLDR
- AMD stock trades near $253 on October 27, 2025, hovering around record highs after gaining roughly 90% year-to-date.
- OpenAI deal announced October 6 includes 6 gigawatts of GPU supply starting late 2026, plus warrants for up to 10% of AMD shares, potentially generating over $100 billion in new revenue.
- Oracle ordered 50,000 MI450 GPUs on October 14 for cloud data centers, while IBM quantum computing breakthrough on AMD chips on October 24 pushed shares up 7-8%.
- Bank of America raised price target to $300, HSBC to $310, with at least 29 Buy ratings now on the stock as analysts project major earnings growth.
- AMD’s forward P/E ratio sits around 40x with market cap near $370 billion, leaving little room for execution errors as competition from NVIDIA and Intel heats up.
AMD hit an all-time high of $262.42 in premarket trading on Monday morning.
Advanced Micro Devices, Inc., AMD
The chipmaker now sits near its all-time high. Year-to-date gains have reached approximately 90%.
AMD’s market capitalization stands around $370 billion. That makes it one of the world’s largest semiconductor companies.
The Philadelphia Semiconductor Index is up about 32% this year. AMD’s performance has outpaced that benchmark by a wide margin.
The stock’s climb accelerated dramatically in October. Three major announcements in three weeks fueled the rally.
On October 6, AMD unveiled a partnership with OpenAI. The deal calls for AMD to supply roughly 6 gigawatts worth of Instinct GPUs starting in late 2026.
That translates to hundreds of thousands of high-end AI chips. OpenAI also secured warrants to buy up to 10% of AMD’s shares at certain milestones.
The company projects the OpenAI relationship could generate more than $100 billion in new revenue over four years. That’s roughly four times AMD’s total sales from last year.
Investors responded with enthusiasm. AMD’s stock jumped over 34% in a single day on the OpenAI news.
Wall Street Upgrades Pour In
Bank of America analyst Vivek Arya raised his 12-month price target to $300 from $250. He cited positive announcements at the 2025 OCP Global Summit.
HSBC made one of the most aggressive calls. The firm lifted its target to $310 from $200 previously.
Jefferies boosted its target from $200 to $300. Wolfe Research upgraded AMD to Outperform with a $300 target as well.
Mizuho recently increased its target from $205 to $275. Wells Fargo similarly moved to $275 with an Overweight rating.
According to MarketBeat data, AMD now has at least 29 Buy or Strong Buy ratings. Only one Sell rating remains on the stock.
The average analyst price target has climbed into the mid-$200s. A few holdouts remain cautious with targets near $210.
Goldman Sachs and Citi have maintained Neutral stances. Those firms see AMD’s recent run as fully pricing in the good news.
One week after the OpenAI announcement, AMD secured another major win. Oracle said on October 14 it will deploy 50,000 AMD MI450 GPUs in its cloud data centers.
The order will roll out in 2026-27 as part of new AI supercluster installations. Oracle touted the partnership as delivering the best price-performance for AI workloads.
Even on a day when broader markets wobbled, the Oracle deal gave AMD a 3% pre-market boost. The news reinforced that any credible AI win can move the stock higher.
IBM Breakthrough Adds Fuel
The most recent catalyst came from an unexpected source. On October 24, IBM researchers revealed they ran a quantum computing error-correction algorithm on AMD’s standard data-center chips.
This task was previously thought to require specialized quantum hardware. The validation of AMD’s technology in advanced computing contexts electrified traders.
AMD shares jumped about 7-8% that day to a new record high. The quantum computing feat capped off a remarkable October for the company.
In the span of a few weeks, AMD secured deals with OpenAI and Oracle. It also had its hardware underpin a novel IBM achievement.
AMD’s forward price-to-earnings ratio has ballooned to around 40 times expected 2026 earnings. That’s over 100 times its trailing 12-month earnings.
Rival NVIDIA trades around 28-30 times 2026 earnings. The broader S&P 500 sits closer to 20 times.
This means AMD’s valuation assumes substantial future growth. The company must execute nearly perfectly on its AI strategy.
Management is guiding for about $8.7 billion in revenue in Q3. That would represent roughly 20% year-over-year growth.
AMD’s last quarter saw record sales of $7.68 billion, up 32% year-over-year. The company is targeting approximately $33 billion in revenue for full-year 2025.
If the OpenAI and Oracle deals bring in tens of billions in new revenue, AMD’s earnings could multiply over the next 2-3 years. That would help the company grow into its current valuation.
Any stumble could prove painful for shareholders at these levels. Potential risks include product delays, supply constraints, or shifts in AI demand.
NVIDIA holds an estimated 90-94% share of the data-center GPU market. AMD is pitching itself as an alternative with an open-platform approach.
The company is leveraging standard interfaces and open software. It’s integrating CPUs, GPUs, and networking technology into turnkey AI systems like the new Helios racks.
Meta Platforms is reportedly evaluating AMD’s MI300/MI450-based systems for its AI data centers. By 2026, AMD could be supplying multiple hyperscale cloud companies.
Intel is not sitting idle. At this month’s Open Compute Project summit, Intel unveiled a forthcoming data-center AI chip called Crescent Island.
The chip aims at AI inference tasks and is due in 2026. NVIDIA also took a 4% stake in Intel worth $5 billion to co-develop some future chip technologies.
AMD’s Q3 earnings report is set for November 4. Analysts expect revenue of approximately $8.7 billion, marking a strong jump from the same quarter last year.
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