Advanced Micro Devices, Inc.’s (NASDAQ:AMD) new 6GW graphics processing unit (GPU) deal with Meta Platforms Inc (NASDAQ:META) is drawing mixed reactions on Wall Street, with JPMorgan and Goldman Sachs staying cautious while BofA Securities leans bullish on the long-term earnings upside.
Ratings And Targets Up Front
- JP Morgan analyst Harlan Sur maintained a Neutral rating on AMD.
- Goldman Sachs analyst James Schneider reiterated a Neutral rating on AMD and raised the price forecast to $240 (up from $210 prior).
- BofA Securities analyst Vivek Arya maintained a Buy rating on AMD with a price forecast of $280.
JPMorgan: Big Revenue Upside, But Warrants Cloud Margins
Sur said the Meta deal, along with AMD’s earlier OpenAI agreement, increases confidence that AMD could secure additional multi-gigawatt deals with other hyperscalers and AI labs.
The analyst estimates that Meta’s planned 6GW deployment could generate $23 billion to $25 billion in annual revenue from 2027 to 2030, or roughly $90 billion to $100 billion over four years.
He said the Meta and OpenAI agreements alone could push AMD’s data center GPU revenue well above current 2027 expectations, even before factoring in contributions from other customers such as Oracle Corp (NYSE:ORCL), which plans MI450 deployments in the third quarter of 2026.
While the Meta deal includes some customization of the MI450 platform, Sur expects custom AI application-specific integrated circuit (ASIC) programs to remain separate from GPU programs and continues to project that ASIC total addressable market growth will outpace GPU growth in the coming years.
Sur cautioned that the warrant structure—up to 160 million AMD shares tied to deployment and milestone targets could represent $30 billion to $100 billion in equity value, and could reduce gross margins by 200 to 400 basis points on revenue tied to the deal due to pricing adjustments.
At the same time, the analyst highlighted AMD’s ability to customize its chiplet-based platforms as a key competitive advantage.
He also expects AMD to expand its server central processing unit (CPU) presence at Meta, which management identified as a lead customer for its upcoming sixth-generation “Venice” CPUs.
Sur believes AMD is positioned to continue gaining server CPU share versus Intel Corp (NASDAQ:INTC), given its product roadmap and supply backdrop.
Goldman: Better Visibility With Meta, Still Neutral On Execution Risk
Schneider said AMD’s new five-year, 6GW GPU partnership with Meta strengthens the company’s position with a top-tier hyperscaler and improves visibility into future market share gains.
The analyst said the financial structure mirrors AMD’s October 2025 OpenAI agreement and includes performance-based warrants translating to roughly 10% ownership.
The analyst said the announcement modestly pressures Nvidia Corp (NASDAQ:NVDA) and Broadcom Inc (NASDAQ:AVGO) amid rising competition from major customers.
Despite the positive developments, he maintains a Neutral rating on AMD, citing the company’s significant exposure to OpenAI and elevated operating expenses.
Schneider said he could take a more constructive stance if he gained clearer visibility into deployment timing at Meta and OpenAI through 2027.
BofA: Deal Supports $20+ EPS Path And CPU Upside In AI
Arya said AMD’s new multi-year, multi-generation agreement to supply up to 6GW of computing capacity to Meta beginning in the second half of 2026 marks a positive step toward the company’s long-term goal of generating more than $20 in EPS by 2030.
The analyst noted that the structure mirrors AMD’s earlier OpenAI deal, with Meta receiving performance-based warrants for up to 160 million AMD shares, or about 10% of the company.
He acknowledged that the equity component raises questions about dilution. Still, full dilution would require the stock to approach $600, roughly three times current levels, at which point shareholders would likely still see substantial accretion.
Arya estimates that each gigawatt of deployment represents roughly $15 billion to $20 billion in revenue opportunity and about $6 billion in net income potential.
He also said the deal reinforces his view that CPUs are becoming increasingly crucial in AI inference workloads.
The analyst noted that Meta could spend more than $150 billion annually on capex, with AMD potentially capturing about $25 billion per year, leaving room for Nvidia and possibly Broadcom, which could benefit through networking and related infrastructure.
AMD Price Action: Advanced Micro Devices shares were down 1.39% during regular trading and down 1.91% in after-hours trading on Wednesday, last trading at $206.84, according to Benzinga Pro data.
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