AMD has been quite busy this month. It first revealed its agreement with OpenAI for 6 gigawatts of power for OpenAI’s AI infrastructure across multiple generations of AMD Instinct GPUs. 

This agreement also included AMD issuing OpenAI a warrant for up to 160 million shares of AMD common stock, structured to vest as specific milestones are achieved.

Another significant move was on October 14, when Oracle and AMD revealed an expansion of their collaboration. The first publicly available AI supercluster powered by AMD Instinct MI450 Series GPUs will have its initial deployment of 50,000 GPUs in Oracle Cloud Infrastructure, starting in calendar Q3 2026 and expanding in 2027 and beyond.

As if these big deals weren’t enough, on October 14, at the Open Compute Project (OCP) Global Summit in San Jose, AMD showcased its “Helios” rack-scale design, based on the new Open Rack Wide specification, introduced by Meta. 

AMD CEO Lisa Su is confident in Helios rack’s performance.

Image source: Jerod Harris/Getty Images

AMD Q2 revenue grows 32% to $7.7 billion

On August 5, AMD reported its results for Q2 of fiscal 2025.

During the earnings call, AMD CEO Lisa Su said:

Helios is purpose-built for the most demanding AI workloads, with each rack connecting up to 72 GPUs that can operate as a single massive AI accelerator. Helios is expected to deliver up to a 10x generational performance increase for the most advanced frontier models.

Here are the AMD earnings highlights:

  • Revenue of $7.7 billion, an increase of 32% year over year
  • Gross margin of 40.0%, compared to 49% in Q2 2024
  • Net income of $872 million, an increase of 229% YoY
  • Diluted earnings per share (EPS) of $0.54 compared to $0.16 in Q2 2024

The company provided an outlook for Q3 of fiscal year 2025:

  • Revenue of $8.7 billion +/- $300 million 
  • Expected non-GAAP gross margin of approximately 54%
  • Revenue from AMD Instinct MI308 shipments to China not included

Bank of America raises AMD stock price target to $300

Bank of America analyst Vivek Arya and his team updated their opinions on AMD shares after the Helios rack-scale platform was showcased at the OCP Conference.

The analysts said they have greater visibility into the deployment and ramp outlook of MI450 Series’ Helios racks launching in the second half of 2026, supported by key industry customers such as Oracle, Meta, and OpenAI. 

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They now assume 50% OpenAI deal (6 GW deployment over 4 years) fall-through in their base model. Bank of America also raised sales/EPS estimates and highlighted upside toward $10 to $11 EPS power by calendar year 2027 at 100% fall-through.

Analysts noted downside risk factors for AMD: 

  • Execution on first rack-scale product (MI400 Series)
  • Timing/magnitude of Middle East AI projects
  • Uneven nature of consumer and enterprise spending that could delay success of new products
  • High reliance on one outsourced manufacturing partner
  • Maturity of current game console cycle

Upside risks include greater share gain potential in the PC and server processor market against competitors.

Related: Bank of America updates Nvidia stock outlook on AI bubble fears

Arya reiterated a buy rating and raised the target price from $250 to $300, based on 33 multiple of his estimate for non-GAAP EPS for fiscal year 2027, which is toward the middle of AMD’s historical range of 14 to 55.

He added that the increase was justified by AI growth and CPU share gains, offset by slower growth in cyclical embedded/console markets.

Key takeaways:

  • Analyst raised AMD stock target price to $300
  • AMD Q2 revenue increased 32% to $7.7 billion
  • The company showcased its Helios rack-scale platform
  • AMD extended its partnership with Oracle
  • The company made an agreement with OpenAI for 6GW of GPU power

Related: Analysts reset Intel stock forecast