AMD struck a deal with Meta to supply its latest AI chips for powering up to six gigawatts of compute in Meta’s AI data centers, marking a major shift in enterprise AI infrastructure.

Analysts raised price targets after the news, with several firms projecting substantial upside to AMD’s valuation on the back of the contract.

The initial rollout features a custom Instinct MI450 GPU paired with sixth-generation EPYC Venice CPUs and ROCm software in the Helios rack-scale system for large-scale AI compute.

The deal positions AMD as a competitor to Nvidia in AI chips, though leadership in the market remains a question for now.

Meta’s diversification into AMD complements Nvidia usage, potentially balancing supplier risk and accelerating AI-powered services across Meta’s platforms.

Markets will assess Meta’s buying pace, AMD’s delivery of MI450-based systems, and the deal’s potential to alter AMD’s competitive trajectory in AI chips.

This collaboration positions AMD at the heart of the AI hardware race and signals a move beyond algorithms to scalable, energy-efficient, high-performance computing backbones for AI applications.

The partnership includes performance-based stock warrants that could allow Meta to acquire up to 10% of AMD based on shipment targets and stock performance, adding an equity component to the contract.

Investors are watching Nvidia’s upcoming results for signals on demand and pricing dynamics, and how Meta and AMD's deal might influence broader AI server spending.

There is growing focus on whether data-center chip demand can broaden beyond a single dominant supplier and how Nvidia’s results could affect sentiment on AI hardware demand.

Meta’s rationale centers on diversifying compute and pushing AI at unprecedented scale, while AMD emphasizes hardware-plus-software and system integration.

Analysts reacted positively, with price-target revisions signaling optimism about AMD’s trajectory and the deal’s impact on the AI computing landscape.