Jefferies Reiterates Buy Rating on AMD
Jefferies analyst Blayne Curtis reiterated a Buy rating and $300.00 price target on AMD (NASDAQ: AMD).
“The long-discussed AMD-META partnership is a clear positive providing some much-needed assurances after the NVDA/META announcement last week.
The deal bears strong resemblance to the OpenAI agreement announced in October of 2025, wherein AMD agrees to exchange warrants for GPU revenue.
We previewed the potential for this sort of agreement in our Weekly from January 30th (HERE).
We acknowledge the agreements do come at a cost to AMD, but view them as a necessary step to establish a meaningful footprint that should drive future engagements both with OAI/Meta and at additional customers.
Amazon has a long history of warrant deals (ALAB, CRDO, etc) and now the question will be if warrant deals or some sort of subsidization will be the entry ticket for future engagements with hyperscalers.
The Street was already baking in some combination of AI revenue from OAI and Meta (we model $26B of AI rev in 2027 and $36B in 2028), but should AMD be able to ship 2GWs per year to OAI and Meta in 2028, that would be ~$60B of AI revenue alone and $20 in EPS (vs AD “$20 before 2030” plan).
In terms of readthroughs for peers, we acknowledge the news skews headline negative for NVDA but also view this more in the context of overwhelming demand for compute vs. vendor preference as we continue to view NVDA as the technology leader in the space.
For AVGO, the added wrinkle of the first GW being tied to a custom variant of the MI450 does raise questions of whether META will follow through on ASIC plans.
We already highlighted that the LLM ASICs had been pushed to late 2027 and META remains committed to the MTIA (rank/recommendation) program with AVGO.
On the interconnect side, AVGO has an opportunity in scale-up and scale-out switching with these AMD wins.
We also view Astera Labs as a potential beneficiary of the agreement with potential for meaningful retimer attach and scale-up switching with UAL.
Deal Structure Similar to OpenAI: On February 23, 2026, AMD entered into a strategic arrangement with META for the purchase of AMD Instinct GPU products.
In connection with this deal, AMD issued Meta a performance-based warrant to purchase up to 160 million shares of common stock at an exercise price of $0.01 per share.
Vesting of these shares occurs in tranches tied to hardware purchase milestones, beginning with an initial binding commitment from Meta for 1GW equivalent of AMD products and reaching full vesting upon the purchase of 6GW gigawatt equivalent.
Additionally, vesting is contingent upon AMD’s stock price reaching specific thresholds, escalating to $600 per share for the final tranche. The warrant is exercisable until February 23, 2031.
META (along with OAI) are permitted to sell the shares once they are acquired and vested.”
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
