Advanced Micro Devices (AMD) shares pushed aggressively to the upside this morning after Meta Platforms (META) signed a $60 billion artificial intelligence (AI) chip deal with Nvidia’s (NVDA) rival.
The post-announcement rally has AMD testing its 20-day moving average (MA) as of this writing, with a clear break above $217 expected to accelerate bullish momentum in the near term.
That said, AMD stock remains down roughly 19% versus its year-to-date high on Tuesday.
Does Meta Deal Warrant Buying AMD Stock?
AMD shares soared on this expanded agreement with the Facebook parent as it transforms the company from a mere component supplier to a primary architectural partner for one of the world’s largest AI spenders.
“This is clearly an opportunity to expand beyond what a regular commercial deal would’ve been,” AMD chief executive Lisa Su told CNBC in an interview today.
Meta has committed to deploying six gigawatts of AMD-powered artificial intelligence infrastructure, which experts believe could drive tens of billions of dollars in incremental revenue over the next few years.
And while some would focus on dilution risk given the chipmaker issued Meta performance-based warrants to buy up to 160 million shares, Su dubbed it a “win-win,” given that these warrants only vest as META hits specific shipment milestones, guaranteeing a massive, long-term customer.
AMD Shares Are Trading at a Discount to Nvidia
While the AI narrative dominates, the rollout of AMD’s sixth-gen EPYC “Venice” CPUs is actively recapturing market share from Intel (INTC) as well, offering a high-margin foundation that offsets research and development (R&D) costs.
Financially, Advanced Micro Devices maintains a pristine balance sheet with accelerating free cash flow, allowing for buybacks to continue, which could mitigate the aforementioned dilution risk even further.
AMD shares’ 14-day relative strength index (RSI) also sits at about 49 currently, indicating upward momentum remains far from exhaustion.
Finally, at roughly 35x forward earnings, Advanced Micro Devices is trading at a notable discount to rival Nvidia, which makes it even more attractive as a long-term holding.
What’s the Consensus Rating on Advanced Micro Devices?
Wall Street analysts also recommend owning AMD stock in 2026. The consensus rating on Advanced Micro Devices sits at “Moderate Buy” currently, with the mean target of about $287 indicating potential upside of more than 30% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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