Advanced Micro Devices

AMD just locked in a multi-year, multi-generation partnership with OpenAI to deploy 6 gigawatts of AMD GPUs, with the first 1 gigawatt of MI450 chips rolling out in the second half of 2026. Management says this single deal is expected to deliver tens of billions of dollars in revenue and be highly accretive to earnings. This is the kind of anchor customer that transforms a company's trajectory overnight.

Revenue grew 34 percent over the past year, and net profit margins of 12.5 percent are more than double the industry average. AMD isn't just chasing growth, it's converting that growth into real profit. With AI accelerator demand still exploding and margins expanding alongside revenue, the financial flywheel is spinning faster every quarter.

NVIDIA's real edge isn't just chips, it's CUDA, the software platform developers have used for more than a decade. AMD's competing platform is improving fast, but switching costs are real. Until AMD fully closes this gap, some customers will stick with NVIDIA even when AMD's hardware is competitive on price and performance.

After a massive run, AMD trades at roughly 54 times forward earnings, more than double NVIDIA's multiple. The OpenAI deal is enormous, but the expectations baked into the stock are also enormous. With a beta of 2.4, AMD swings more than twice as hard as the broader market, so any stumble in execution or AI spending could trigger a sharp pullback.