The race to the top of the AI sector continues, with Advanced Micro Devices Inc (NASDAQ:AMD) unveiling an expanded partnership with Meta Platforms (META). The multi-year deal will include AI expansion via the deployment of as many as 6 gigawatts of graphic processing units (GPUs) for data centers, as well as early shipments of its MI450 GPU.
This marks another major partnership milestone for the chipmaker, which also penned a deal with OpenAI back in October. AMD was last seen 7.5% higher to trade at $212.21, on track for its best day since Jan. 21. The chip stock is a long-term outperformer on the charts, up 95% over the past 12 months, and is attempting to push break out of recent consolidation around the $200 level.
Analysts have yet to chime in on the update, but heading into today the majority already leaned bullish. In fact, 33 of the 46 firms in coverage called the stock a "buy" or "strong buy," and its average 12-month price target of $277.62 is a 32.1% premium to current levels.
Options traders are swarming AMD in response to today's news, with 193,000 calls and 137,000 puts exchanged so far, or double the average intraday volume. The weekly 2/27 210- and 220-strike calls are flying off the shelves, with new positions opening at both.
Options are looking affordable, too. This is per the equity's Schaeffer's Volatility Index (SVI) of 59%, which ranks in the 33rd percentile of its annual range, meaning options traders are pricing in low volatility expectations. The stock has tended to exceed those expectations over the past year, too, per its Schaeffer's Volatility Scorecard (SVS) of 94 out of 100.
