How AMD Stock Surged 58% Last Month

Core Insights - Advanced Micro Devices (AMD) shares increased by 58.3% in October 2025, primarily driven by a significant deal with OpenAI and other operational changes [1][8] Company Developments - AMD divested a hardware manufacturing operation and secured a major supercomputing contract at Oak Ridge National Laboratory, although these events had minimal impact on stock performance [1] - The pivotal event for AMD was the announcement of a multiyear processor supply deal with OpenAI, involving the shipment of 6 gigawatts of AMD processors to OpenAI's data centers, with revenue-generating shipments for the first gigawatt of AMD Instinct MI450 chips expected to start in the second half of 2026 [3][8] AI Market Dynamics - The deal with OpenAI clarified AMD's role in the AI landscape, revealing that OpenAI was already utilizing AMD's older Instinct MI300X and MI350X AI accelerators, which surprised some investors who assumed OpenAI exclusively used Nvidia accelerators [4] - OpenAI's agreement with AMD allows for the purchase of up to 10% of AMD's stock as AI system installations progress, indicating a strategic partnership [5] - Despite AMD's advancements, Nvidia remains a strong competitor, having signed a larger deal with OpenAI for 10 gigawatts of annual power consumption and a $38 billion deal with Amazon, further solidifying Nvidia's position in the AI hardware market [6][7] Competitive Positioning - While AMD did not dominate the AI accelerator market, the partnership with OpenAI may enhance AMD's credibility and open opportunities with other tech giants, as AMD's offerings could provide advantages such as lower power consumption and more affordable costs compared to Nvidia's products [7]