HSBC Lifts AMD Price Target to $310 on OpenAI Deal Visibility

Core Viewpoint - Advanced Micro Devices, Inc. (AMD) is positioned for significant revenue growth in the AI sector due to its recent deal with OpenAI, which is expected to enhance AMD's AI GPU revenue visibility through 2030 [1][2]. Group 1: OpenAI Deal Impact - The OpenAI agreement is projected to generate approximately USD 80 billion in total revenue for AMD, significantly exceeding its estimated AI GPU revenue of USD 7.3 billion for 2025 [3]. - OpenAI will deploy six gigawatts of AMD GPUs over several years, starting with 1 gigawatt of AMD Instinct MI450 GPUs in the second half of 2026 [2][3]. Group 2: Revenue Estimates - Analysts have revised their 2026 AI GPU revenue estimates for AMD to USD 19.8 billion, up from USD 13.9 billion, reflecting expectations of a 0.5 gigawatt deployment for OpenAI [3]. - The deal is seen as underestimating by consensus, indicating potential for further revenue upside [2]. Group 3: Production Capacity - AMD is expected to increase its CoWoS allocation to 70,000-80,000 wafers for 2026, with ongoing capacity expansion anticipated into 2027 [4].