AMD upgraded to Buy as Jefferies cites 'strong validation' from OpenAI deal

Investing.com -- Jefferies upgraded AMD to Buy from Hold with a new $300 price target (up from $170), saying OpenAI’s plan to purchase up to 6 gigawatts of AMD hardware “materially changes” the company’s AI outlook.

“We rarely do this but are upgrading AMD post their announcement with OpenAI this morning,” Jefferies said in a note on Monday. “This is a strong validation of AMD’s AI roadmap and the level of AI demand in general.”

Jefferies said OpenAI’s plans to buy $80 billion to $100 billion worth of AMD equipment through 2030 marks a “multi-generational opportunity” for the chipmaker, potentially generating “well over $100 billion” in revenue from OpenAI and other customers over the next four years.

The brokerage lifted its 2026 and 2027 earnings-per-share forecasts to $6.30 and $9.32, respectively, valuing AMD at 32 times 2027 earnings.

It also cited improved “server checks” and potential for “500 basis points per year share gains in Server CPUs with Venice” as additional reasons for the upgrade.

Jefferies said AMD’s partnership with OpenAI, which includes a warrant for up to 160 million shares vesting as deployments scale to 6 gigawatts, underscores accelerating demand for AI compute infrastructure.

“Lots of details will need to be sorted out but what is clear is that AI spending is accelerating even from here,” Jefferies wrote, adding that AMD is positioned for significant share gains in server markets as AI workloads expand.

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