AMD Stock Just Got a New Street-High Price Target. Should You Buy AMD Stock Now?

Core Insights - Advanced Micro Devices (AMD) has announced a significant partnership with OpenAI, potentially granting OpenAI a 10% stake in AMD and involving the deployment of six gigawatts of AMD's Instinct GPUs over several years, starting late next year [1] - The partnership has led to bullish investor sentiment, with HSBC raising AMD's price target from $185 to $310, projecting a revenue potential of around $80 billion from the OpenAI deal, which is over 10 times the expected revenue from AMD's AI GPUs for 2025 [2] Company Overview - AMD is a major player in the semiconductor industry, headquartered in Santa Clara, California, specializing in high-performance computing and graphics solutions, with a market capitalization of $410 billion [3] - The company launched the Instinct MI350 Series GPUs this year, showcasing advancements in AI performance and energy efficiency, and is developing next-generation AI racks called "Helios" to meet the growing demand for AI [4] Recent Developments - AMD has expanded its partnership with Oracle, which will deploy 50,000 AMD GPUs starting in Q3 2026, with additional deployments planned [5] - AMD stock has surged significantly, gaining 65% over the past 52 weeks, 109% year-to-date, and 57% in the past month, reaching a 52-week high of $253.39 on October 24 [5] Market Position - Despite the stock surge, AMD's price-to-earnings ratio stands at 74.8 times forward earnings, which is considerably higher than the industry average, indicating that the stock may be trading at a premium [6]