AMD Shares Surge Following Multi-Year AI Chip Supply Agreement with OpenAI
Advanced Micro Devices (AMD) has entered into a multi-year agreement to supply AI chips to OpenAI, leading to a significant rise in AMD's stock price.
Advanced Micro Devices (AMD) has announced a multi-year agreement to supply AI chips to OpenAI, the developer of ChatGPT. Under the terms of the deal, OpenAI will purchase several generations of AMD's AI chips, starting with the Instinct MI450 series expected in 2026. The agreement includes a provision allowing OpenAI to acquire up to 10% of AMD's shares at a nominal price, contingent upon AMD meeting specific performance milestones.
AMD anticipates that this partnership will generate over $100 billion in new revenue over the next four years, not only from OpenAI but also from other customers influenced by this collaboration.
Following the announcement, AMD's stock experienced a significant surge, rising by 24% on Monday and an additional 5% on Tuesday, reaching approximately $215 per share. This marks a 77% increase since the beginning of the year, surpassing Nvidia's 40% return over the same period.
Technical analysis indicates that AMD's stock has broken out from an inverse head and shoulders pattern, suggesting potential for continued upward momentum. Investors are advised to monitor key price levels, including the $227 area near the stock's record intraday high and a projected bullish target of $272, based on the measuring principle applied to the chart pattern.
Support levels to watch during potential pullbacks include the $174 area, corresponding to the inverse head and shoulders' neckline, and the $150 level, aligning with previous resistance points that may now serve as support.
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