Why Did AMD Stock Rise 8% in a Single Day?

One morning, you wake up to check and notice AMD stock has jumped nearly 9% before breakfast. No earnings report. No Fed announcement. Just one deal. On February 24, AMD stock closed at $213.90, up 8.8% from the previous session, on the back of a landmark agreement with Facebook parent Meta Platforms. 

If you blinked, you missed the moment. But the story behind it? That's worth every second. Let's break down what triggered the nearly 9% rally in AMD stock price, what the Meta deal really means, and why this move matters for investors watching the AI chip race unfold.

Why is AMD Stock Rising?

The catalyst was straightforward on paper. AMD secured a deal to sell up to $60 billion in artificial intelligence (AI) chips to Meta Platforms over 5 years. But the headline number only scratches the surface of what this agreement actually involves.

The expanded partnership will begin with shipments of AMD Instinct GPUs and 6th-gen AMD Venice and Verano EPYC CPUs in the back half of 2026. Initially, the GPUs will be based on AMD's newest MI450 architecture.

The deal is for AMD's Helios rack systems to be deployed in Meta's AI infrastructure — 6 gigawatts of compute in total. Each gigawatt translates to "double-digit billions" in revenue for AMD, noted CEO Lisa Su.

As a sweetener, the agreement includes a performance-based warrant that could amount to up to 160 million AMD shares, giving Meta skin in the game and signaling deep, long-term commitment on both sides.

Why Meta Chose AMD & What It Says About AI Chip Race

This wasn't a random vendor decision. Meta frames this partnership as a move to "diversify our compute", making sure Meta doesn't become too dependent upon AI chips from Nvidia. To AMD CEO, the big significance is that this partnership secures a major long-term customer for its most advanced AI GPUs and CPUs, while allying with Meta puts AMD "at the center of the global AI buildout."

In plain English: Meta doesn't want all its eggs in the Nvidia basket. AMD just became the alternative of choice, and that's a massive vote of confidence.

AMD Stock's Rocky Road Into This Rally

The rally did not come out of nowhere. Earlier this month, AMD had fallen 17 percent on February 4 after its first-quarter forecast missed some analyst expectations. This was despite Q4 revenue of $10.27 billion beating the $9.67 billion consensus, according to CNBC.

Investors reacted to what many saw as “good but not good enough.” Concerns around weaker China sales due to export controls added to the uncertainty, prompting a selloff.

The Meta deal quickly shifted sentiment. Even after the nearly 9 percent single-day jump, AMD stock remains about 4 percent lower on a year-to-date basis, according to Google Finance data.

What AMD Share Price Rally Means for Investors

Here's why the deal matters beyond the one-day pop:

• Revenue visibility: A multi-year, multi-gigawatt agreement gives AMD rare long-term clarity in a cyclical industry
• MI450 validation: The deal is AMD's newest MI450 architecture's first mega-customer, removing doubts around the chip's commercial readiness
• Analyst conviction: Analysts forecast a 60% increase in AMD's earnings in both 2026 and 2027, well above the average earnings growth of companies in the S&P 500 index.
• Broader AI tailwinds: The new partnership signals massive investment by tech giants, highlighting the immense demand for specialized AI hardware.

However, FirstMark founder Rick Heitzmann has flagged concerns for AMD investors following the Meta deal.

Risks Investors Should Watch Out For:

Heitzmann cautioned investors against chasing the rally, calling the deal structure “circular commerce” where the roles of customer, lender, and partner overlap. When equity is used to lock in sales, the quality and sustainability of that revenue can become unclear.

He questioned how much of the deal is a firm commitment versus a conditional promise, noting limited clarity on timelines and option terms. That makes it harder for shareholders to judge AMD’s real order strength and the true cost of securing large AI clients.

If the AI cycle slows, such structures could quickly unwind, increasing dilution and demand risks. AMD’s earlier OpenAI deal had a similar setup, he added.

AMD vs Nvidia: The AI Race Heats Up

AMD still trails Nvidia in AI chips, but the perception gap is narrowing, even if revenue has not caught up yet. With major deals now signed with OpenAI and Meta, two of the world’s biggest AI spenders, AMD is moving beyond challenger status and positioning itself as a strategic supplier.

Big Tech plans to invest hundreds of billions of dollars in AI infrastructure in 2026, and AMD already holds the No. 2 market share in data centre chips, with momentum continuing to build.

For Indian investors looking at US tech stocks, AMD's story is about being in the right place at the right time. According to INDmoney's consensus of 54 analysts, 77.8% recommend a 'BUY' rating for AMD stock with an average target price of $286.3, an upside of 25% from the current price.

The Bottom Line for AMD Investors

One deal. One day. 8.8% up. But the real story is what this signals for the next five years of AI infrastructure spending and AMD's seat at that table.

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