Advanced Micro Devices (AMD) has been among the hottest stocks in the semiconductor sector, and Wall Street is taking notice. The chipmaker has been on a deal-making tear, locking in massive artificial intelligence infrastructure partnerships with some of the biggest names in tech.
That momentum has at least one prominent analyst raising his conviction on AMD stock. After a private meeting with AMD executives, BNP Paribas analyst David O'Connor came away more bullish than ever. Let’s see why.
AMD's Gigawatt Deal Pipeline Is Just Getting Started
To understand why O'Connor is so enthusiastic, it helps to understand what AMD has been building.
Last month, AMD announced a landmark partnership with Meta Platforms (META). Under the multi-billion-dollar agreement, Meta is expected to deploy six gigawatts of AMD Instinct graphics processing units across multiple product generations.
The deal followed a similarly sized six-gigawatt agreement with OpenAI, announced earlier. Both partnerships include a custom GPU accelerator co-developed specifically for each customer's workload, something AMD CEO Lisa Su described as a "transformational" shift in how the company engages with the world's top artificial intelligence builders.
So what does all of this mean for investors going forward?
According to O'Connor, it means the pipeline is far from full. A Seeking Alpha report states that O'Connor emphasized the mood was "quite positive" across both the AI GPU and server central processing unit (CPU) businesses. The analyst also said he sees the potential for more gigawatt-scale deals coming down the road, citing accelerating demand and a supply environment that simply can't keep pace.
O'Connor holds an “Outperform” rating on AMD with a $265 price target, according to the Seeking Alpha report.
Why Warrants Won't Be Part of Every Deal
One question investors have been wrestling with since the Meta announcement: Will AMD hand out stock warrants to every major customer that signs a gigawatt deal? The short answer is no, and AMD made that crystal clear.
As part of the Meta agreement, AMD issued the social media giant warrants for up to 160 million shares of AMD common stock. The warrants are performance-based, tied to Meta hitting purchase milestones as it scales to six gigawatts of Instinct GPU deployments, as well as certain AMD stock price thresholds. The final tranches vest at $600 per share. Basically, AMD warrants are reserved for partners who are doing the heavy lifting to build out the broader AI ecosystem alongside the company.
Su echoed that sentiment directly during AMD's Morgan Stanley Technology, Media & Telecom Conference in early March 2026. Su emphasized that the relationships between OpenAI and Meta are "pretty special in how they are framed as multigenerational partnerships."
AI Demand Is Fueling Both the GPU and CPU Businesses
Perhaps the most underappreciated part of AMD's story right now is the CPU side of the business. While the company's Instinct GPU lineup gets most of the headlines, Su has been vocal about the explosive demand for AMD's EPYC server processors. At the Morgan Stanley conference, she said the CPU market has "far exceeded" even her own expectations.
As agentic artificial intelligence scales up, companies are deploying more accelerators. They're also spinning up enormous numbers of AI agents that need traditional compute infrastructure to run.
AMD's sixth-generation EPYC processor, code-named Venice, is expected to ramp in the second half of 2026 on TSMC's two-nanometer process. Su said every major customer wants it the moment it ships, a sign of just how competitive the product is.
With the GPU ramp, the CPU tailwind, and a deal pipeline that analysts believe is still growing, the bull case for AMD is building on multiple fronts.
What Is the AMD Stock Price Target?
Analysts forecast AMD to increase revenue from $34.64 billion in 2025 to $135 billion in 2030. In this period, adjusted earnings are forecast to expand from $4.17 to $24. If AMD stock is priced at 20x forward earnings, which is below the current multiple, it could gain 150% over the next four years.
Out of the 45 analysts covering AMD stock, 30 recommend “Strong Buy,” two recommend “Moderate Buy,” and 13 recommend “Hold.” The average AMD stock price target is $287.68, above the current price of about $199.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.