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Key Points
Advanced Micro Devices (NASDAQ: AMD) has signed a significant deal with OpenAI to supply Instinct MI450 chips, marking a pivotal moment in its expansion within the AI chip market. The agreement encompasses an initial 1 gigawatt supply in 2024, scaling up to 6 gigawatts over time. This surge in demand for AI technology has contributed to a 36% year-over-year revenue increase reported by AMD.
Analysts forecast AMD’s earnings per share to reach $9.62 by 2027, with a potential stock price of $586 if trading maintains a forward price-to-earnings multiple of 61. Even at a lower multiple of 35, the expected share price would still be $336.
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