Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Should You Buy AMD Stock After Its OpenAI Partnership?
Ruby Layram
7th Oct 2025
Big news has hit the tech world, AMD and OpenAI have struck a multi-year deal for AMD to supply AI chips, potentially up to 6 gigawatts over time, starting with 1 gigawatt deployment in 2026.
As part of the agreement, OpenAI also gets warrants to acquire up to 160 million AMD shares (roughly 10% of the company, depending on milestones). Unsurprisingly, AMD’s share price responded well, jumping more than 20 % on the news.
The market sees this as a signal that AMD is now no longer just a player in CPUs and GPUs, but one of OpenAI’s core compute partners. It challenges Nvidia’s dominance in the AI chip space.
But as with all big moves, is AMD stock still worth buying for long-term investors?
Also read: How to invest in AIs backbone
What makes this deal exciting (and what to watch)
Before we take a look at whether AMD is still worth buying, it’s helpful to understand why this deal has created such a stir. Here are a few reasons why the news made headlines around the world.
- Scale & revenue potential: The deal could translate into tens of billions of dollars in new revenue over multiple years.
- Strategic validation: Being chosen by OpenAI signals confidence in AMD’s AI compute roadmap, good optics when competing with giants like Nvidia.
- Warrants = built-in upside (if things go well): The warrants could allow OpenAI to take a meaningful stake, tying their success to AMD’s longer-term performance.
- Diversification in AI supply chain: OpenAI diversifying its hardware sources means AMD has a chance to capture more share in a booming AI demand environment.
Potential risks to look out for
Giving up warrants is effectively giving OpenAI a “coupon” on future upside. If AMD doesn’t deliver, those warrants could eat into shareholder value. Jim Chanos, the well-known short-seller, has already voiced skepticism about whether the revenue side justifies the trade.
Supplying AI chips at scale, maintaining performance, managing costs, ensuring power/cooling infrastructure, these are some pretty big challenges to deal with! The journey certainly won’t come without bumps.
It’s also important to understand that Nvidia is still deeply entrenched. Even if AMD gains ground, it has to outperform in many dimensions (efficiency, software, ecosystem). Outpacing Nvidia will be no easy feat!
What are experts saying?
If you want to get technical (and sound really smart!), it’s worth paying attention to what top analysts are saying.
Analysts generally lean “Buy” on AMD. The average 12-month price target sits in the ~$200 area, implying modest upside from current levels.
Some models see longer-range upside of 100 %+ by 2029 if growth compounds strongly. But others caution that past valuation cuts, especially when AMD’s data centre or AI revenue expectations didn’t pan out, must remain top of mind.
So yes, there’s belief in the upside, but it’s not “set and forget.”
Should you buy AMD now?
The short answer is yes, but don’t put all of your eggs in one basket!
AMD’s OpenAI deal gives it a potential pathway to meaningful AI growth. If AMD can execute on chip delivery, cost control, and move fast enough, this deal could be transformative over 3–5 years.
For long-term investors, getting in now, or gradually, is smart, but only as part of a diversified portfolio.
Smart strategies to consider
Here’s how smart investors could go about buy AMD stock in 2025.
- Scale in gradually: Don’t throw all your chips in. Use a dollar-cost average approach so you don’t catch a top.
- Set target ranges: Decide ahead of time: “If AMD hits $X, I’ll trim,” or “If margins fall below Y, I’ll reduce exposure.”
- Keep tabs on signals: Watch OpenAI’s deployment timeline, AMD’s gross margins in AI segment, and competitive moves by Nvidia or others.
- Don’t over-allocate: AMD is exciting, but it’s still a growth/tech bet. In a balanced portfolio it should be a portion, say, 5–10% (depending on your risk tolerance).
- Have exit criteria: If the stock gets overextended or macro winds shift, be ready to take profits or cut back.
Final thoughts
The AMD–OpenAI partnership is a bold move that could reshape how AI compute is sourced and deployed. For individual, long-term investors, it offers a compelling story and real upside. But only if AMD can deliver.
This isn’t just a “pump the stock” moment. It’s a test: Can AMD turn opportunity into durable value?
If you decide to buy, do it with your eyes open, and keep your portfolio balanced. Because even in the best-case outcomes, the road to success will be full of bumps, surprises, and moments where discipline matters.
-
Fancy learning more about investing? Make sure to sign up to the MoneyMagpie Invest newsletter.
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here, including opinions, commentary, suggestions or strategies, are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
Leave a Reply