Advanced Micro Devices has signed a new multi-year supply agreement with Meta Platforms that could significantly reshape its long-term revenue outlook. According to Piper Sandler, the deal may position AMD to generate roughly $100 billion in additional revenue over the next five years.
The agreement, announced on Thursday, is structured similarly to AMD’s existing partnership with OpenAI and highlights the company’s growing strength in the AI infrastructure market.
Custom AI chips and large-scale deployment
Piper Sandler analyst Harsh Kumar said AMD will supply Meta with a customized version of its MI450 GPU, integrated with the Helios rack system. The chip is a variant of AMD’s standard design and does not require a new tape-out, meaning development costs and production adjustments are limited.
As part of the agreement, AMD will grant Meta up to 160 million warrants, with a final strike price of $600. The arrangement is linked to a planned 6-gigawatt deployment starting in the second half of 2026.
The first gigawatt of capacity has already been committed. AMD expects a meaningful ramp in the fourth quarter of 2026, with projected revenue in the double-digit billions per gigawatt. Kumar estimates revenue per gigawatt will likely fall in the $17–$18 billion range, broadly consistent with AMD’s OpenAI engagement.
Strong demand for MI450 and Helios systems
Piper Sandler noted exceptionally strong demand for AMD’s MI450 GPUs and Helios rack systems. The Meta rollout is expected to utilize Venice and Verona CPUs, further expanding AMD’s footprint across high-performance AI computing platforms.
Importantly, the brokerage emphasized that there is no revenue overlap between the Meta and OpenAI agreements, as they involve different workloads and chip configurations. This suggests incremental growth rather than internal cannibalization.
Potential impact on earnings per share
Kumar believes the Meta agreement could ultimately increase AMD’s earnings per share by approximately $5 during peak years. The deal remains supportive of the company’s long-term objective of reaching $20 in EPS.
If execution meets expectations, the Meta partnership could represent a major step forward in AMD’s strategy to capture a larger share of the rapidly expanding AI infrastructure market.
