Key Takeaways
- Colin Sebastian from Robert W. Baird reaffirmed his Buy rating on AMD stock, setting a $300 price target based on the Meta collaboration and extended AI revenue forecasts.
- AMD and Meta have entered a multi-year agreement to integrate up to 6 gigawatts of AMD Instinct GPUs into Meta’s artificial intelligence infrastructure.
- Initial deliveries of 1GW are slated for late 2026, featuring MI450-based GPUs combined with EPYC “Venice” CPUs on Meta’s Helios rack-scale architecture.
- A milestone-driven warrant for as many as 160 million AMD shares is included, which could grant Meta approximately 10% ownership if completely exercised.
- Evercore ISI maintains its Buy recommendation on AMD with a $358 price objective.
Advanced Micro Devices has secured what may be one of the most significant AI hardware partnerships in the industry’s history.
On February 25, 2026, Meta and AMD announced a binding multi-year, multi-generation collaboration to integrate up to 6 gigawatts of AMD Instinct GPUs throughout Meta’s upcoming AI computing infrastructure.
The magnitude of this agreement is substantial. According to Robert W. Baird’s Colin Sebastian, each gigawatt of deployment has the potential to translate into billions of dollars in revenue for AMD.
Advanced Micro Devices, Inc., AMD
Sebastian reaffirmed his Buy recommendation for AMD stock while maintaining his $300 price objective.
He emphasized that the Meta partnership provides AMD with substantially clearer long-term AI revenue forecasts extending across multiple years, rather than just a few financial quarters.
Initial shipments totaling 1GW are anticipated to commence during the latter half of 2026. These will feature a customized Instinct GPU based on AMD’s MI450 architecture, deployed on the Helios rack-scale platform created through the Open Compute Project initiative.
This initial rollout will also integrate the MI450 GPU with AMD’s sixth-generation EPYC processors, known by the codename “Venice,” utilizing ROCm software.
Understanding the Warrant Structure
Among the most notable elements of this arrangement is a performance-linked warrant covering up to 160 million AMD shares.
The warrant becomes exercisable as AMD achieves specific shipment targets — beginning with the initial 1GW delivery and progressing toward the complete 6GW commitment. Various technical and business benchmarks must also be satisfied.
According to reports from the Financial Times and Associated Press, complete exercise of this warrant could provide Meta with as much as 10% ownership in AMD. This arrangement directly connects Meta’s financial stake to AMD’s operational performance.
Meta indicated the collaboration is intended to diversify its AI computing infrastructure and reduce dependency on a single hardware provider, thereby enhancing flexibility and operational resilience.
AMD characterized the partnership as a long-term expansion encompassing GPUs, EPYC processors, and rack-scale systems tailored to Meta’s specific computational requirements.
Wall Street’s Response
Evercore ISI independently maintained its Buy rating for AMD with a $358 price target — representing the more optimistic of the two analyst perspectives discussed.
Both analysts interpret the Meta agreement as tangible evidence that AMD is establishing itself as a viable competitor to Nvidia in the large language model infrastructure space.
The milestone-based warrant structure introduces an additional dimension — it synchronizes Meta’s financial interests with AMD’s capability to execute and deliver at scale.
AMD’s initial 1GW shipments to Meta are projected to start in the second half of 2026.
