AMD's $100 Billion OpenAI Deal Could Supercharge AI Chip Growth, Analyst Says, Projecting Massive Earnings Boost By 2030

Core Insights - Advanced Micro Devices (AMD) has entered a multi-year partnership with OpenAI, which could generate over $100 billion in revenue over the next four to six years [1][3][4] - The partnership positions AMD competitively against Nvidia and Broadcom in the AI hardware market, with OpenAI's infrastructure expansion expected to increase demand across the semiconductor ecosystem [2][5] Revenue Generation - AMD will supply up to 6 gigawatts (GW) of computing capacity using its next-generation Instinct MI450X GPUs starting in late 2026 [4] - Each gigawatt of capacity is estimated to generate approximately $17.5 billion in revenue, leading to a total of more than $100 billion from the entire deployment [4] Financial Projections - The partnership is projected to yield 30–35% EBIT margins, with each additional GW of revenue potentially adding $0.67–$2.65 per share in annualized EPS by 2026–2027 [4] - By 2030, AMD could achieve earnings exceeding $15 per share with full deployment of 6 GW and a 35% margin assumption [4] Competitive Landscape - The deal enhances AMD's position as a rival to Nvidia and Broadcom, both of which have also secured significant AI infrastructure agreements with OpenAI [5] - Nvidia's agreement, valued at around $100 billion, involves a deployment of 10 GW for its Vera Rubin systems starting in 2026 [5] Market Impact - OpenAI is recognized as a leading player in generative AI cloud computing, with its expanding infrastructure expected to benefit the entire semiconductor supply chain [6] - OpenAI aims to deploy over 200 GW of compute capacity in the coming years, indicating the early stage of AI infrastructure development [6] Sales and Stock Performance - Projected sales for AMD in 2025 are estimated at $32.88 billion, with an EPS of $3.85 [7] - AMD's stock was trading 3.39% higher at $210.55 as of the last check [7]