What Happened?
Advanced Micro Devices (AMD) shares experienced a notable increase of 8.77% on February 24, 2026, closing at $213.84. This surge followed the announcement of a multi-year partnership with Meta Platforms, which includes a supply agreement for AI chips valued at up to $60 billion over five years. The agreement allows Meta to acquire up to a 10% equity stake in AMD, contingent on performance-based milestones related to shipments and stock price targets.
Why It Matters
The partnership is significant as it positions AMD as a key player in the growing AI infrastructure market, particularly against dominant competitor NVIDIA. Analysts project a bullish outlook for AMD, with a consensus Buy rating and an average price target of approximately $263. The company’s MI300 series AI accelerators are gaining traction, accounting for nearly one-third of AMD’s data center revenue, which reached $4.3 billion in recent quarters. The deal with Meta is expected to generate substantial revenue, with CFO Jean Hu estimating double-digit billions of dollars per gigawatt in data center AI revenue.
What’s Next?
Looking ahead, AMD is set to begin initial shipments of its custom GPU accelerators in the second half of 2026. Investors are closely monitoring the upcoming earnings report from NVIDIA, which could influence market sentiment and demand for AI chips. As AMD continues to expand its footprint in the AI sector, the performance of its stock will likely be closely tied to its ability to meet the ambitious targets set forth in its agreement with Meta.
