AMD Stock Surges on Multi-Year AI Chip Deal with OpenAI

Advanced Micro Devices shares rose sharply today, building on yesterday’s gains, after announcing a multi-year agreement to supply AI chips to OpenAI, the creator of ChatGPT.

Under the terms of the deal, OpenAI will purchase several generations of AMD’s chips, potentially taking a 10% stake in the Nvidia rival. AMD anticipates the agreement will generate over $100 billion in new revenue over the next four years, not only from OpenAI but also from other customers seeking to capitalize on the growing demand for artificial intelligence processing power. This partnership signals a broadening of the AI supply chain beyond current market leader Nvidia.

AMD shares were up more than 5% in recent trading, around $215, following a 24% jump yesterday, putting the stock on track for a record closing high. Year-to-date, AMD has seen a 77% increase, significantly outpacing Nvidia’s 40% return over the same period. Technical analysts point to a breakout from an inverse head and shoulders pattern as a key driver of the recent surge, with potential resistance levels around $227 and $272. For investors interested in learning more about chart patterns, resources like Investopedia’s guide to chart patterns can be helpful.

Analysts are also monitoring support levels near $174 and $150 should the stock experience a pullback. AMD officials stated they expect the deal to positively impact revenue growth and market share in the rapidly expanding AI sector, further solidifying their position as a key player in the technology industry. You can find more information about AMD’s products and services on their official website.

The company will provide further updates on the financial impact of the OpenAI deal during its next earnings call.