Core Insights - Advanced Micro Devices (AMD) has secured a significant deal with OpenAI, potentially generating $100 billion in revenue over the coming years, leading to a price target increase by Bank of America to $250 [1][9] - The partnership positions AMD as a serious competitor to Nvidia in the AI hardware sector, with expectations of increased demand for AI silicon [4][5] Financial Projections - Bank of America anticipates AMD will achieve earnings exceeding $15 per share by 2030, a substantial revision from previous estimates, driven by a commitment to provide OpenAI with 6 gigawatts of AI computing power starting in late 2026 [2] - Each gigawatt of computing power could generate approximately $17.5 billion in revenue, indicating a significant potential earnings boost if AMD's full capacity is utilized [7] Market Position and Competitive Landscape - The deal with OpenAI is seen as a pivotal moment for AMD, enhancing its competitive stance in the AI compute race against Nvidia, despite Nvidia's current market leadership [4][5] - The partnership is expected to benefit not only AMD but also other chip, memory, optical, networking, and foundry suppliers due to increased capital expenditures in the AI sector [2] Stock Market Reaction - The new price target of $250 reflects a valuation based on 33 times the estimated earnings per share for 2027, aligning with historical multiples and a PEG ratio of 1.1 [9] - The deal is part of a broader trend where significant investments in AI are likely to uplift the entire sector, benefiting multiple companies including Nvidia and Broadcom [6]