AMD Stock Surges as TD Cowen Analyst Hikes Price Target After Landmark OpenAI Deal
Advanced Micro Devices (NASDAQ: AMD) is making headlines on Wall Street after a top analyst from TD Cowen significantly raised his price target for the semiconductor company. The move follows AMD’s blockbuster artificial intelligence (AI) partnership with OpenAI—the developer behind ChatGPT—which has intensified the race for dominance in AI computing.
On Friday, TD Cowen analyst Joshua Buchalter revised his 12-month price target for AMD from $195 to $270, while maintaining a Buy rating. The revision signals growing confidence in AMD’s role in the AI arms race and highlights the strategic impact of its deal with OpenAI, which is seen as a strong counter to Nvidia’s long-standing dominance in the sector.
🔍 A Game-Changing AI Partnership
Under the terms of the multi-year agreement, OpenAI will deploy 6 gigawatts of AMD’s Instinct GPUs, marking one of the most aggressive AI infrastructure rollouts to date. The deal also includes a warrant that allows OpenAI to purchase up to 160 million shares of AMD stock—a move that could eventually give the AI firm a 10% stake in AMD.
“This is more than just a technical partnership,” said Buchalter. “It’s a powerful validation of AMD’s AI strategy and its growing credibility in a field that’s become essential to the future of computing.”
Though Buchalter noted the deal wasn’t entirely unexpected—given OpenAI CEO Sam Altman’s presence at AMD’s recent AI event—he described the magnitude and scale of the agreement as “shocking.”
📈 Market Reaction & Analyst Sentiment
AMD shares have already climbed roughly 78% year-to-date, driven by optimism around its AI initiatives. The OpenAI deal appears to have added a further layer of momentum, with investors viewing the collaboration as a turning point in AMD’s battle to gain share in the AI GPU market.
Despite the bullish stance, Buchalter maintained a neutral view heading into AMD’s Q3 earnings report. He explained that much of the near-term upside may already be priced in, particularly with AMD’s upcoming Analyst Day scheduled for November 11, which could offer further updates on its AI roadmap.
Even so, the analyst updated his long-term model, stating that even with conservative assumptions, AMD’s earnings per share (EPS) could approach $10 by 2027, signaling robust profit growth potential.
⚔️ Competing with Nvidia
For years, Nvidia (NASDAQ: NVDA) has been the undisputed leader in AI hardware, thanks to its CUDA software ecosystem and dominant market share. However, AMD’s recent moves suggest it is gaining traction.
“The OpenAI agreement marks a significant strategic victory,” said Buchalter. “It places AMD firmly in the conversation as a credible alternative in AI compute. This is no longer a one-player game.”
The broader market has responded positively, viewing AMD’s progress as healthy competition that could reduce industry bottlenecks and create more options for AI developers.
📊 Analyst Performance
Joshua Buchalter currently ranks No. 750 out of over 10,000 analysts on TipRanks, with a success rate of 60% and an average return of over 10% per rating. His track record and strategic insights are often seen as a bellwether for institutional sentiment in the semiconductor sector.
