Advanced Micro Devices (NASDAQ: AMD) shares surged on Tuesday after the chipmaker unveiled a major multi-year artificial intelligence (AI) partnership with Meta Platforms (NASDAQ: META).
AMD stock jumped as much as 10% in pre-market trading and was up more than 7% shortly after the open, before trimming gains to trade about 6% higher at around $207.
The rally followed news that Meta has agreed to purchase 6 gigawatts of AMD’s graphics processing units to power the social media giant’s next generation of AI infrastructure.
Under the agreement, Meta will deploy custom AMD Instinct GPUs across multiple generations, beginning with a chip based on AMD’s MI450 architecture. Shipments supporting the first gigawatt of deployment are expected to start in the second half of 2026.
The systems will also incorporate sixth-generation AMD EPYC CPUs, codenamed Venice, built on the Helios rack-scale architecture jointly developed by AMD and Meta through the Open Compute Project.
AI chips demand
Notably, the scale of the commitment points to growing demand for advanced AI chips as major technology companies race to expand computing capacity. The 6-gigawatt purchase represents one of the largest AI infrastructure deals disclosed by AMD and positions the company more aggressively against dominant players in the market.
Under the deal, AMD will grant Meta a performance-based warrant for up to 160 million shares, or about 10% of the company, tied to shipping milestones.
Meta already runs millions of EPYC CPUs and large volumes of Instinct MI300 and MI350 GPUs, and the new agreement strengthens that relationship while positioning it as a lead customer for AMD’s next-generation processors.
The partnership comes amid intensifying AI chip competition, with Meta also expanding ties with Nvidia and AMD, securing other major AI supply deals, including one with OpenAI.
Investors are betting the Meta agreement will drive meaningful multi-year revenue growth, fueling the stock’s sharp rally.
Featured image via Shutterstock
Source: https://finbold.com/why-amd-stock-is-skyrocketing-today/
