Standing in the shadow of a giant, even the tall are often overlooked. That’s been AMD’s  (AMD)  story as Nvidia’s  (NVDA)  dominance keeps the spotlight, even as AMD pushes deeper into AI chips and data centers.

On Oct. 6, The Wall Street Journal reported that AMD and OpenAI had entered into a multibillion-dollar partnership under which AMD’s chips will power OpenAI’s AI infrastructure and data centers.

AMD has issued warrants for up to 160 million shares as part of the agreement, with vesting milestones tied to deployment volume and AMD’s share price.

The first portion will vest with the first full gigawatt deployment, with more tranches unlocking as OpenAI scales to 6 gigawatts over several years.

The partnership will involve AMD’s upcoming Instinct MI450 series chips, which OpenAI will obtain directly or through its cloud service partners.

AMD stock rose 3.8% on Oct.7, following a sharp rally of 23.7% in the prior session. Wall Street is reevaluating AMD stock after the surge.

AMD is closing the gap with Nvidia

“This deal [with OpenAI] is AMD’s largest win in its chase for market share,” says Stephen Guilfoyle in a note published on TheStreet Pro.

Guilfoyle is 30-year Wall Street veteran who now runs Sarge986 LLC, a family trading operation. He has been a supporter of AMD. “Among my chip names, AMD was still my most heavily weighted,” he said.

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While Nvidia is widely seen as the dominant player in the AI chip design space, AMD has been narrowing the gap.

“AMD may have been in second place, but it was a distant second place. A lot less distant as of Monday morning,” Guilfoyle said.

AMD shares peaked in Q1 2024 as strong demand for its CPUs and GPUs drove up investors’ enthusiasm. From then to April 2025, the rally faded amid margin pressure, tougher competition from Nvidia, and concerns over tariffs and China chip sales ban.

From May to early August, AMD stock regained momentum amid a rebound in the artificial intelligence boom and the lifting of the chip sales ban to China, which boosted investor confidence.

Don’t underestimate Lisa Su, analyst says

“Never, ever underestimate Lisa Su,” says Guilfoyle. “She’s the grooviest. That’s why.”

Guilfoyle noted that Su was prioritizing inference and called it a tree that quickly bore fruit. “Su basically elected to stop wasting efforts chasing Nvidia on designing chips built to aid large language models and other associated tools and go down a route that she felt underserved,” he said.

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Following AMD stock’s sharp surge on Oct. 6, Guilfoyle said his discipline demands a “little” sale following Oct. 6’s surge,.

He also discussed the stock’s technicals: “The cup pattern that we have been discussing, will obviously not develop a handle, but instead a gap-up opening that could at some point fill. This leaves the pivot on the left side apex of the cup close to $187.”

Going off that pivot, Guilfoyle raised his target price for AMD stock to $234 from $188, which implies an upside of 10.6% from the current level.

“There could be another bit of profit taking in the offing. I won’t be going heavy on these sales,” Guilfoyle said.

He pointed out that market positioning remains favorable. “Only about 2.6% of AMD’s float is held in short positions, so while there will be some short coverings, the rally is largely organic.”

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