The share price of Advanced Micro Devices Inc. (AMD) is up by over 10% at $216.81 in premarket trading after the American semiconductor company inked a major supply deal with the Facebook parent company Meta.
Multi-Year Supply Deal
In a statement, Meta announced that it entered a multi-year agreement with AMD to power its AI infrastructure with up to 6 GW of AMD Instinct GPUs, the silicon computing technology that underlies modern AI models.
The two companies inked the deal as Meta requires massive and scalable compute power to handle the growing demand of the company’s growing AI workload. The agreement is part of Meta’s Compute initiative, which the social media giant said aims to future-proof its leadership in AI.
Meta also plans to buy from AMD central processors that include a customizable variant to meet the company’s needs. Su told Reuters that the CPU will deliver powerful performance while keeping energy expenditure as low as possible.
Agreement Anticipated to Drive Revenue Growth
AMD executive vice president, chief financial officer and treasurer Jean Hu said that the deal will boost the company’s financials.
“We expect this partnership to drive substantial multi-year revenue growth and be accretive to our non-GAAP earnings per share, marking another significant step forward in delivering on our ambitious long-term financial model,“ Hu said. “The performance-based structure also tightly aligns AMD and Meta around execution and long-term value creation.”
AMD’s shares surged in premarket following news of the agreement. The stock closed at 196.60 on Monday, down by 1.77%.
Source: https://coinpaper.com/14875/amd-stock-forecast-jumps-10-after-multi-year-meta-ai-pact
