"OpenAI's choosing AMD for its infrastructure signals something important: NVIDIA Corporation ( NASDAQ:NVDA) doesn't own the entire AI chip market anymore. While NVIDIA still dominates with a $4.54 trillion market cap and 53% net margins, AMD is carving out share where it matters. The company's Q3 2025 revenue hit $9.25 billion, up 35.6% year-over-year, with gross margins recovering to 51.7%. That's the kind of operating leverage investors want to see."
"Piper Sandler maintains an Overweight rating on AMD, pointing to the Helios cluster ramp and OpenAI demand as key drivers for 2025. The firm expects MI300X chips to see substantial growth as hyperscalers diversify away from single-vendor dependence. Prediction markets show 73% confidence AMD will beat Q1 2026 earnings estimates when it reports February 3. The competitive dynamic is clear: NVIDIA proved the AI chip market generates extraordinary profits (107% return on equity, 62.5% year-over-year growth in its latest quarter)."
AMD secured a chip deal with OpenAI, and the stock rose 119% over the past year to $252 as AI revenue momentum accelerated. OpenAI's choice indicates the AI chip market is no longer exclusively dominated by NVIDIA. NVIDIA retains a $4.54 trillion market cap and high margins, while AMD's Q3 2025 revenue reached $9.25 billion, up 35.6% year-over-year, with gross margins at 51.7%. Piper Sandler rates AMD Overweight, citing the Helios cluster ramp and OpenAI demand, and forecasts MI300X growth as hyperscalers diversify. Analysts predominantly rate AMD Buy, with a $287.38 consensus target contingent on execution.
Read at 24/7 Wall St.
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