Advanced Micro Devices (NASDAQ:AMD) shares climbed 9% on Tuesday after earlier surging as much as 14% following news of an expanded multi-year collaboration with Meta (NASDAQ:META) focused on supplying graphics processing units for artificial intelligence infrastructure.
Under the agreement, AMD will provide Instinct GPUs as part of a large-scale deployment expected to reach up to 6 gigawatts of capacity. Initial shipments supporting the first gigawatt of deployment are slated to begin in the second half of 2026. The rollout will feature a customized AMD Instinct GPU built on the MI450 architecture alongside 6th-generation AMD EPYC processors, code-named Venice.
The infrastructure will be based on AMD’s Helios rack-scale architecture, introduced at the 2025 Open Compute Project Global Summit and jointly developed by AMD and Meta through the Open Compute Project collaboration.
As part of the partnership, AMD granted Meta a warrant allowing the purchase of up to 160 million shares of AMD common stock. Vesting of the warrant is tied to specific shipment milestones, beginning with the initial 1-gigawatt deployment and continuing in stages as Meta scales purchases toward the full 6-gigawatt target.
Meta has already incorporated AMD EPYC CPUs and Instinct MI300 and MI350 GPUs into its data center infrastructure and is expected to serve as a lead customer for AMD’s upcoming 6th Gen EPYC processors, including the workload-optimized Verano chip.
AMD Chief Financial Officer Jean Hu said the partnership is expected to support multi-year revenue expansion and contribute positively to non-GAAP earnings per share.
Wedbush analyst Matt Bryson said the announcement helps ease investor concerns about potential delays in MI450 deployment timelines as well as uncertainty tied to reduced investment expectations from OpenAI. “We view AMD’s success in the immediate future as having limited ramifications for NVDA given the companies’ differences in scale as well as tight supply chain characteristics that we believe necessarily moderate near to intermediate share shifts,” Bryson wrote. “Longer-term, a more competitive AMD could eventually weigh on NVDA’s growth.”
Wolfe analyst Chris Caso said the agreement appears comparable in scale to AMD’s previously disclosed OpenAI deal, which he estimates could generate between $15 billion and $20 billion in revenue per gigawatt. Assuming a 35% operating margin, Caso estimated the partnership could contribute roughly $3 in earnings per gigawatt after accounting for warrant-related dilution.
He noted that Meta is already an AMD AI customer, meaning the agreement is not entirely incremental to revenue forecasts for 2026 and 2027. “We don’t think there is more than a few $billion in META AI revenue in CY27 consensus, so we expect most of what’s been announced in this deal to be incremental to consensus EPS, and therefore very significant for AMD’s fundamentals and the stock,” Caso wrote.
Caso added that the deal could carry negative implications for Broadcom (NASDAQ:AVGO), which currently supplies silicon for Meta’s custom XPU systems. He previously estimated roughly $5.4 billion in Broadcom revenue tied to Meta’s custom silicon in 2027 — modest compared with his expectation of more than $67 billion from Alphabet — though he said it remains unclear whether AMD’s expanded role will materially alter those assumptions.