AMD’s AI Ambitions Face Market Scrutiny Despite Landmark Contracts

While securing historic artificial intelligence contracts from industry titans like Meta and OpenAI, shares of semiconductor designer AMD have encountered significant headwinds in recent weeks. This divergence between operational success and stock performance raises a critical question: what is pressuring the equity amid record-breaking business developments?

The Meta and OpenAI Foundations

Looking beyond short-term volatility, AMD is aggressively cementing its position as the second most significant player in the AI chip market. The company has announced a multi-year infrastructure partnership with Meta. This agreement will see the social media giant procure computing power equivalent to up to 6 gigawatts, powered by AMD’s Instinct GPUs, with the first deliveries scheduled to commence in the second half of 2026.

This follows a nearly identical 6-gigawatt deal sealed with OpenAI last autumn. Combined with other substantial orders—including 50,000 AI chips for Oracle—these partnerships provide AMD with a reliable revenue foundation for the coming years.

Record Results Clash with Lofty Expectations

AMD’s operational performance has been robust. For the fourth quarter of 2025, the company surpassed Wall Street’s forecasts, posting revenue of $10.27 billion and earnings per share of $1.53. Its guidance for the current first quarter of 2026 also exceeded general market expectations.

Nevertheless, the stock declined in February amid a broader sell-off in the technology sector. Analysts attribute this correction to excessively high market expectations. Some investors had speculated on even more aggressive AI revenue targets and responded to management’s more realistic outlook by taking profits. Macroeconomic factors, including rising oil prices and geopolitical tensions, further weighed on the entire sector.

Should investors sell immediately? Or is it worth buying AMD?

Technological Edge as a Competitive Driver

A key catalyst for these mega-deals is AMD’s upcoming chip generation. The new MI450 accelerator, manufactured by contract partner TSMC using an advanced 2-nanometer process, is expected to provide a technological advantage. This positions AMD favorably against its primary rival, Nvidia, whose architecture is based on a 3-nanometer technology.

To support its ambitious growth, AMD’s management is now intensely focused on securing its supply chains, particularly for memory chips and wafers. The company projects an annual revenue growth rate of 35 percent over the next three years.

The Path Forward: Execution is Key

Following a decline of just over 13 percent since the start of the year, AMD’s shares closed at €165.80 on Friday. For investors, the focus is now shifting from announcements to operational execution. CEO Lisa Su anticipates year-over-year growth exceeding 60 percent in the data center segment for Q1 2026 and plans to scale the AI business to a multi-billion dollar level by 2027.

Whether the stock can resume its long-term upward trend—it still shows a gain of nearly 86 percent over a 12-month period—will largely depend on the timely delivery of the Meta and OpenAI systems in the latter half of 2026.