AMD upgraded to Buy from Jefferies following megadeal with OpenAI

[AMD headquarters in Santa Clara, California, USA]
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Jefferies upgraded its rating on Advanced Micro Devices (NASDAQ:AMD [https://seekingalpha.com/symbol/AMD]) to Buy from Hold following the massive infrastructure deal [https://seekingalpha.com/news/4501935-amd-surges-25-after-ai-infrastructure-deal-with-openai] the semiconductor firm reached with Microsoft-backed (NASDAQ:MSFT [https://seekingalpha.com/symbol/MSFT]) OpenAI.

AMD's shares surged 23.7% by the close of market trading on Monday. It had inched up another 1.4% during early post-market trading.

In response to the deal, Jefferies upgraded the stock to Buy and dramatically increased its price target to $300 from $170.

"The partnership has the potential to generate well over $100B from OpenAI, new, and existing customers over the next four years," according to Jefferies analysts, led by Blayne Curtis, in an investor note.

"We came away from our Asia trip incrementally positive on AMD with potential for 500 bps+/yr share gains in Server CPUs with Venice but didn't pick up anything from the ODMs in terms of AI ramps," Curtis said. "The announcement of OpenAI as a lead customer with the potential for $80-100B in revenue across 6GW of compute through 2030 materially changes that outlook. OpenAI continues to landgrab AI compute capabilities and has plans to buy equipment from Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]), AMD and Broadcom (AVGO [https://seekingalpha.com/symbol/AVGO])."

MORE ON AMD AND MICROSOFT

* AMD Up 35%: OpenAI Strikes Again (Rating Downgrade) [https://seekingalpha.com/article/4828144-amd-up-35-percent-openai-strikes-again-rating-downgrade]
* AMD: Game-Changing Deal With OpenAI (Rating Upgrade) [https://seekingalpha.com/article/4828122-amd-game-changing-deal-with-openai-upgrade]
* AMD: The OpenAI Deal That Changes Everything (Rating Upgrade) [https://seekingalpha.com/article/4828117-amd-the-openai-deal-that-changes-everything-rating-upgrade]
* OpenAI introduces apps such as Figma, Zillow into ChatGPT; also launches agent builder and Codex update [https://seekingalpha.com/news/4502100-openai-introduces-apps-such-as-figma-zillow-into-chatgpt-also-launches-agent-builder-and]
* Tech Voices: AMD-OpenAI infrastructure deal; Cerebras's IPO plans [https://seekingalpha.com/news/4502097-tech-voices-amd-openai-infrastructure-deal-cerebrass-ipo-plans]