<div id="readability-page-1" class="page"><div><div><p><strong>Advanced Micro Devices Inc</strong>.’s (NASDAQ:AMD) multi-year deal with OpenAI could unlock $135 billion in revenue and mount a serious challenge to <strong>Nvidia Corp</strong>.’s (NASDAQ:NVDA) long-standing dominance, according to Goldman Sachs.</p><p>In a note shared Tuesday, the bank’s analyst <strong>James Schneider</strong> called the announcement &#34;a strong positive&#34; for the AMD’s long-term GPU business and significantly raised its earnings estimates and price target. </p><p>Goldman hiked its 12-month price target on AMD stock to $210, up from $150. The firm kept a “Neutral” rating due to funding risks and heavy customer concentration.</p><h2>How Big Is OpenAI’s Opportunity For AMD?</h2><p>The AMD-OpenAI deal involves deploying a staggering 6 gigawatts (GW) of AMD GPUs—graphics processing units—to power OpenAI's expanding data center infrastructure over the next several years.</p><p>In return, OpenAI could receive up to 160 million AMD shares—valued at around $75 billion, or roughly 10% of the company—through performance-based warrants that vest in stages as GPU deployments progress, with the final tranche triggered by the sixth gigawatt and a $600 AMD share price.</p><p>According to Goldman Sachs, the OpenAI deal represents a $135 billion revenue opportunity for AMD based on projected average selling prices for GPU deployments. </p><p>The bank now expects AMD's earnings per share (EPS), excluding stock-based compensation, to rise by 21% in 2026 and 62% in 2027.</p><p>Goldman's new assumptions forecast staggered GPU deployments starting with 0.25GW in 2026 and scaling to 2GW by 2030. </p><p>Based on this timeline and estimated GPU pricing of $22.5 billion per GW, AMD could see massive top-line growth while also capturing a meaningful share of the AI accelerator market currently dominated by Nvidia.</p><p>The deal also gives AMD access to OpenAI's training stack—previously a near-exclusive Nvidia stronghold—signaling a potential shift in AI chip architecture preferences among leading developers.</p><h2>AMD Partners With OpenAI: Is Nvidia Losing Ground?</h2><p>Nvidia remains the clear leader in AI chips, particularly for training large language models. But the AMD-OpenAI tie-up represents a &#34;modest incremental negative&#34; for Nvidia. According to Goldman Sachs, it reduces the firm's lock on OpenAI's training workloads.</p><p>Still, the bank isn't signaling a massive transfer of market share just yet. </p><p>Nvidia remains a key player, but it now faces an emboldened rival backed by one of the world's most prominent AI developers.</p><h2>What Are The Risks For AMD?</h2><p>Despite the upside, Goldman is not turning outright bullish. </p><p>The bank maintains a neutral rating on AMD, citing &#34;significant customer concentration,&#34; with OpenAI potentially accounting for more than 40% of AMD's revenue by 2027.</p><p>There are also questions about OpenAI's ability to secure sufficient funding to support this multi-year GPU deployment plan. </p><p>If OpenAI fails to meet its financing goals, AMD’s projected revenue gains could be delayed or reduced.</p><h2>Upside Is Limited—For Now</h2><p>Following AMD’s 23% rally on Monday, the new target implies only a 3.1% upside from Monday’s closing price of $203.71. This suggests that much of the optimism is already priced in.</p><p>The risk-reward profile, however, could improve quickly if AMD executes well and OpenAI secures continued funding. In such a scenario, Goldman said it could become &#34;more constructive&#34; on AMD shares in future quarters.</p><p><strong>Now Read</strong>:</p><ul> <li><strong>Private Equity Stocks Burn While Wall Street Parties—Is A Credit Crunch Brewing?</strong></li> </ul><p><em>Image: Shutterstock</em></p></div></div></div>

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<p>AMD's multi-year deal with OpenAI could unlock $135 billion in revenue, challenging Nvidia's dominance in AI chips. Goldman Sachs raised AMD's price target to $210, citing strong long-term GPU business prospects. The deal involves deploying 6 GW of AMD GPUs, with OpenAI potentially receiving 160 million AMD shares. Despite the positive outlook, Goldman maintains a 'Neutral' rating due to customer concentration risks and funding uncertainties for OpenAI. AMD's recent stock rally suggests limited upside, but future performance could improve if OpenAI secures funding.</p>

- Advanced Micro Devices Inc. (AMD) has secured a multi-year deal with OpenAI, potentially unlocking $135 billion in revenue and challenging Nvidia's dominance in the GPU market.  
- Goldman Sachs raised its price target for AMD stock to $210, citing the deal's positive impact on AMD's long-term GPU business, while maintaining a "Neutral" rating due to funding risks and customer concentration.  
- The partnership allows AMD to deploy 6 gigawatts of GPUs for OpenAI, but concerns remain about OpenAI's funding and the potential for AMD to rely heavily on this single customer.

AMD's OpenAI Deal Could Spark A New AI Arms Race With Nvidia