AMD (AMD.US) announced an agreement with AI company OpenAI, receiving a share investment from OpenAI, with shareholding expected to be as high as 10%, Morgan Stanley published a research report saying.
The two parties will also embark on a long-term AI chip collaboration, deploying 6GW of AI computing capacity over the coming years, with an investment scale exceeding US$100 billion.
Morgan Stanley estimated that the share investment from OpenAI will drive the development of AMD's ecosystem. The first phase of the 1GW deployment plan is set to launch in 2H26, utilizing AMD Instinct MI450 GPUs. The cooperation is anticipated to be potentially transformative.
However, the broker cautioned that AMD still needs to prove to the market that its return on investment is competitive compared to Nvidia (NVDA.US). Therefore, Morgan Stanley still kept rating at Equalweight, and elevated its target price from US$168 to US$246.
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AASTOCKS Financial News
Website: www.aastocks.com
| SG Top Picks |
| Stock & Type |
Code |
Strike(Call Level) |
Last |
Effective Gearing |
| AMD (C) |
10760 |
225 (-) |
0.820 |
2.9 X |
| AMD (P) |
10777 |
155 (-) |
0.193 |
2.7 X |
| Nvidia (C) |
10055 |
230 (-) |
0.249 |
4.8 X |
| Nvidia (C) |
10721 |
175 (-) |
0.455 |
4.7 X |
| Nvidia (P) |
10057 |
165 (-) |
0.220 |
3.5 X |
| Nvidia (P) |
10714 |
125 (-) |
0.030 |
6.2 X |
