shares surged on Tuesday after the chipmaker announced a landmark strategic partnership with to deploy up to 6 gigawatts of AMD Instinct GPUs powering Meta’s next generation of AI infrastructure. The deal, worth up to $60 billion over five years, marks one of the largest chip supply agreements in the semiconductor industry and represents a significant milestone for AMD’s efforts to compete with dominant rival Nvidia.
The partnership also grants Meta warrants to purchase up to 160 million AMD shares, potentially turning the social media giant into a major stakeholder in the chipmaker. The announcement sent AMD shares soaring as much as 15% in premarket trading, reflecting broad investor enthusiasm for the deal’s scale and strategic implications.
Inside the $60B AMD–Meta Agreement
Under the terms of the agreement, AMD will supply six gigawatts’ worth of AI chips to Meta over five years, beginning with one gigawatt of its forthcoming MI450 flagship accelerator hardware in the second half of 2026. AMD CEO Lisa Su described the deal as worth “double-digit billions” of dollars per gigawatt, underscoring the extraordinary financial scale of the arrangement.
Meta also plans to purchase central processors from AMD, including a custom variant tuned specifically for the social media platform’s performance and energy efficiency requirements, spanning two generations of AMD CPUs.
As part of the deal’s equity component, AMD will issue warrants for 160 million shares at an exercise price of one cent, vesting in stages tied to both AMD’s stock price milestones, reaching up to $600 per share, and specific technical and commercial conditions Meta must fulfill.
AMD Stock Brief
AMD shares jumped to $214.35 on February 24, a gain of $17.75, or approximately 9%, following a close of $196.60 on February 23. The stock had been under pressure year-to-date, down about 8.2% heading into Tuesday’s announcement, even as it delivered a strong one-year return of roughly 77% through the same period. AMD’s 52-week range spans $76.48 to $267.08, and the stock trades at a trailing price-to-earnings ratio of 75.33, with a one-year analyst price target average of $286.30 and a high target of $365.
The Meta deal comes on the heels of a similar mega-supply agreement AMD struck with OpenAI last year, further cementing AMD’s position as the primary alternative to Nvidia in the fast-growing AI accelerator market. With Meta already AMD’s second-largest customer and Wall Street projecting roughly 34% revenue growth for AMD this year, the new partnership has the potential to significantly accelerate that trajectory.
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