AMD (AMD.US) announced a long-term partnership with OpenAI, BofA Securities issued a research report saying. Starting from the end of 2026, AMD will gradually supply chips with a computing capacity of 6GW, while OpenAI will acquire up to a 10% stake in AMD, with the estimated scale of the collaboration exceeding US$100 billion.
Calculating with each GW bringing incremental revenue of approx. US$17.5 billion and an EBIT margin of 30-35%, BofA Securities predicted that the deal will increase AMD's annualized EPS by 9-35% by the end of 2026/ 2027. By 2030, with the full deployment of 6GW and an EBIT margin of 35%, its EPS could rise to over US$15.
Therefore, the broker kept rating at Buy on AMD, and raised its target price from US$200 to US$250. Furthermore, BofA Securities also kept ratings at Buy for Nvidia (NVDA.US) and Broadcom (AVGO.US), and listed them as AI beneficiaries.
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AASTOCKS Financial News
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| 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 |
