AMD Stock Rises on Expanded Meta AI Partnership
Advanced Micro Devices (NASDAQ: AMD) shares climbed 9% on Tuesday, after initially surging as much as 14%, following the announcement of an expanded multi-year partnership with Meta focused on artificial intelligence infrastructure.
The agreement will see AMD supply its Instinct graphics processing units (GPUs) to support Meta’s large-scale AI deployments. The companies plan to scale installations up to 6 gigawatts of capacity. Shipments for the first 1-gigawatt phase are expected to begin in the second half of 2026.
Custom AI Infrastructure and New Chip Deployments
The deployment will utilize a custom AMD Instinct GPU built on the MI450 architecture, along with 6th Generation AMD EPYC CPUs, codenamed “Venice.” The systems will run on AMD’s Helios rack-scale architecture, which was introduced at the 2025 Open Compute Project Global Summit and developed jointly by AMD and Meta.
As part of the partnership, AMD granted Meta warrants to purchase up to 160 million shares of AMD common stock. These warrants will vest in stages as shipment milestones are reached, beginning with the first gigawatt of GPU deliveries and continuing as deployments expand toward 6 gigawatts.
Meta already uses AMD EPYC processors and Instinct MI300 and MI350 series GPUs across its infrastructure. Under the new agreement, Meta will also serve as a lead customer for AMD’s upcoming 6th Gen EPYC processors, including Verano, which is designed for workload-specific AI optimization.
Revenue Impact and Analyst Reactions
AMD Chief Financial Officer Jean Hu said the Meta partnership is expected to support multi-year revenue growth and contribute positively to non-GAAP earnings per share.
Wedbush analyst Matt Bryson noted that the announcement helps address recent concerns about potential delays in AMD’s MI450 rollout and reduced AI investment expectations from OpenAI. However, he added that near-term competitive impact on Nvidia may be limited due to differences in scale and supply chain constraints. Over the longer term, a stronger AMD position in AI infrastructure could create competitive pressure.
Wolfe Research analyst Chris Caso compared the deal to AMD’s prior OpenAI agreement, estimating potential revenue of $15 billion to $20 billion per gigawatt. Assuming a 35% operating margin, that could translate into roughly $3 in earnings per share per gigawatt after accounting for share dilution from the warrants.
Caso emphasized that while Meta was already an AMD AI customer, much of the announced capacity appears incremental to current 2027 earnings expectations. As a result, the agreement could significantly strengthen AMD’s long-term fundamentals and stock outlook.
The deal may also have implications for Broadcom (NASDAQ: AVGO), which supplies silicon for Meta’s custom processors. Analysts said it remains unclear whether the AMD partnership will materially impact Broadcom’s projected revenue from Meta in 2027.
