Why is AMD Share Rising?

It’s not every day that a chipmaker steals the spotlight from Silicon Valley’s biggest names but AMD just did. Over the past few sessions, the company’s stock has been making headlines, turning quiet optimism into full-blown investor excitement. The buzz is everywhere from Wall Street trading floors to Reddit investing forums as AMD’s surge sparks one burning question: is this just another AI-fueled rally, or the beginning of a bigger shift in the tech power balance?

Let’s break down with this blog exactly why AMD stock is rising, and what could be next for the chipmaker.

Why is AMD Stock Rising Now?

The most immediate catalyst is the multi-year AI chip agreement with OpenAI. Under this deal, AMD will supply its upcoming MI450 GPUs to power OpenAI’s AI infrastructure, aiming for deployment of up to 6 gigawatts of compute over time, with the first gigawatt expected in 2026. To align incentives, AMD has also issued warrants allowing OpenAI to buy up to 160 million shares at a $0.01 strike, contingent on achieving milestones.

Wall Street interpreted this as a signal: AMD is no longer just a CPU / GPU player for consumers, it's aiming to enter the core of AI infrastructure. The news sent AMD stock jumping over 20% in a single session on October 6th, 2025 as per Google Finance. 

Read about it more here

But that deal is only the headline. The foundation beneath the rally rests on AMD’s execution, recent earnings, and strategic moves.

AMD’s Recent Earnings & Strategic Moves

Q1 & Q2 2025: The Numbers & What They Reveal for AMD Stock

In Q1 2025, AMD reported $7.4 billion in revenue, with a non-GAAP net income of ~$1.6 billion (EPS $0.96) and gross margin of ~54 %. This beat raised confidence in AMD’s ability to push into higher-margin segments.

In Q2 2025, revenue climbed to a record $7.7 billion (up ~31-32 % YoY), but operating loss (on GAAP) was $134 million, due in part to investments, shifting mix, and inventory rebalancing. On a non-GAAP basis, the picture was more positive: operating income was ~$897 million, non-GAAP EPS of $0.48.

What this basically suggests is that AMD is successfully scaling, pushing more revenue from high-value computers, but still absorbing costs as it transitions into AI chip production. Analysts have flagged that its operating margin trails sector averages, creating room for improvement.

Strategic & Product Moves Post-Earnings

• AMD recently unveiled its open AI ecosystem vision, highlighting the Instinct MI350 series accelerators and its roadmap toward rack-scale “Helios” infrastructure.
• OpenAI is already working as an “early design partner” with AMD, giving feedback on MI450’s training and inference capabilities, a strong signal that OpenAI will lean on AMD’s roadmap.
• AMD authorized a $6 billion share buyback, signaling confidence in its own valuation. 
• It also continues to bolster its software stack (ROCm) and rack-scale infrastructure, aiming to close gaps vs. entrenched players like Nvidia.

Together, these moves suggest AMD is laying the building blocks: design wins, infrastructure readiness, alignment with a marquee AI partner, and execution watchers are keen to see proof in deployment.

What to Expect from AMD’s Upcoming Earnings?

The next earnings release will be a litmus test for AMD. Key things to watch:

• AI / data centre revenue disclosure: how much of the total is coming from AI chip / server business, and whether that number is accelerating
• Margins direction: can AMD push operating margin upward as scale and product mix improve
• Guidance and outlook: forward revenue / EPS guidance will tell whether management expects continued strength
• OpenAI deal milestones: any confirmation of delivery schedules, ramp plans, or warrant vesting triggers
• Inventory & capital expenditure: how much is being invested in new fabs, capacity, or R&D

Analysts are split: some see the upcoming earnings as the next catalyst, though others remain cautious about how much AI upside can be realized in the near term. 

What Investors Should Keep an Eye On?

• Execution on the OpenAI deal: AMD must deliver on timelines and milestones, any delays or unclear communication could hurt sentiment.
• Margins and costs: Expanding revenue is positive, but rising capex or flat margins may limit upside.
• Competition with Nvidia: AMD’s AI chips need to prove they can meaningfully challenge Nvidia’s dominance.
• Dilution risk: OpenAI’s warrants or fresh share issuance could weigh on existing shareholders.
• Regulatory and geopolitical factors: Export curbs or supply chain hurdles remain potential headwinds.
• Market sentiment: After the rally, some pullback is possible; monitor institutional buying and support levels.

Final Thoughts on AMD’s Rise

AMD’s share price is rising for a reason, the OpenAI deal has recast its narrative, making it a contender in the AI compute race. But deals and headlines don’t always translate into durable growth. The coming quarters must show real deliveries, improving margins, and revenue scale beyond hype.

If AMD can turn the OpenAI showpiece into a repeatable model, it could transform how investors view AMD stock, not just as a GPU / CPU maker, but as a central player in powering the AI era. Keep your eyes on execution, margins, and the pacing of milestone achievements, the difference between a rally and a revolution is in the delivery.

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