Jefferies analysts just made a bold reversal — upgrading Advanced Micro Devices (AMD) to a buy after the chipmaker’s shares surged on news of a major partnership with ChatGPT maker OpenAI.
The tone of Jefferies’ note almost reads like an apology rather than a routine upgrade.
“We rarely do this,” wrote analysts led by Blayne Curtis. “We raised estimates and our [price target] last week following positive server checks but couldn’t triangulate the AI ramp.”
That “AI ramp” became clearer after OpenAI announced plans to purchase up to 6 gigawatts of AMD chips — a deal Jefferies estimates could translate into well over $100 billion in revenue potential. AMD itself has said each gigawatt represents “double-digit billions” in value.
OpenAI’s massive compute buildup isn’t limited to AMD. The company is reportedly spending heavily across Nvidia, Oracle, Hynix, and Samsung, signaling an all-out race to secure data center capacity for its next wave of AI models.
“While none of these deals are binding, they underscore how vast OpenAI sees the need for AI compute,” Jefferies noted. “This is a land grab for compute power and gigawatts of capacity. There’s a lot still to figure out — but what’s clear is that AI spending is only accelerating.”
With its new price target of $300 (up from $170), Jefferies now holds the most bullish forecast on Wall Street, per FactSet data.
Meanwhile, others may soon be rethinking their calls: Goldman Sachs still targets $150, while Deutsche Bank and Wedbush have targets below AMD’s latest close of $203.71.
AMD’s 23.7% surge marked a six-standard-deviation move, according to MarketWatch — one of its biggest single-day rallies this year, second only to the 23.8% jump on April 9.
