Advanced Micro Devices (AMD) has long been a household name for those who game on Microsoft’s Xbox or Sony’s PlayStation 5, but the company’s latest moves are making waves far beyond the living room. In early February 2026, AMD released its fourth-quarter 2025 results, and the numbers were strong: $34.6 billion in total revenue for the year, with a record $16.6 billion coming from its data center segment—a 32% jump from the previous year, according to data reported by The Motley Fool. Yet, despite these impressive figures, the stock tumbled by 15% the following trading day, leaving investors scratching their heads and analysts digging for answers.
What’s behind this apparent disconnect between performance and investor sentiment? The answer, it seems, lies in AMD’s ambitious push into artificial intelligence (AI) hardware and its evolving relationship with OpenAI—the creator of ChatGPT and one of the world’s most valuable AI startups. As AMD gears up to launch its most powerful AI chips ever in 2026, the company finds itself both at the center of opportunity and under a cloud of uncertainty.
Let’s start with the good news. AMD is set to release its MI450 GPUs later this year, chips that are expected to deliver a staggering 36 times more performance than their previous generation when configured within the company’s new Helios data center rack. This rack, designed with specialized hardware and software, aims to squeeze every drop of processing power for the demanding workloads of AI development. During a conference call with investors on February 3, AMD CEO Lisa Su reassured Wall Street that OpenAI would receive its first batch of MI450 GPUs in the second half of 2026 as planned. Su’s comments were meant to calm nerves about the status of the OpenAI deal, which has become a focal point for both hope and anxiety among investors.
Why the anxiety? OpenAI, despite its sky-high valuation of over $500 billion in the private market, is facing some serious financial commitments. According to The Wall Street Journal, the company has agreed to rent $281 billion worth of data center capacity from Microsoft’s Azure cloud and a further $300 billion from Oracle Cloud Infrastructure. On top of that, it has committed to buying up to 6 gigawatts of GPU compute capacity directly from AMD by 2030—a deal that could represent as much as $90 billion in GPU sales, based on estimates from the Substack newsletter More Than Moore. Here’s the rub: OpenAI’s annualized revenue is only about $20 billion, nowhere near enough to cover these obligations without significant new investment.
The situation became even more precarious when Nvidia, AMD’s fiercest rival and the current leader in the AI hardware market, reportedly backed out of a previously announced $100 billion investment in OpenAI. This move, reported by The Wall Street Journal, sent shockwaves through the industry and cast doubt on OpenAI’s ability to raise the capital it desperately needs. If major supporters like Nvidia are getting cold feet, what does that mean for AMD’s massive bet on OpenAI as a cornerstone customer?
During the February 3 conference call, analysts peppered Lisa Su with questions about the OpenAI deal. Su reiterated, “OpenAI will receive the first batch of the latest MI450 GPUs in the second half of 2026 as planned.” While this provided some reassurance, it did little to dispel concerns about whether OpenAI can fulfill its end of the bargain over the long haul. After all, 6 gigawatts of compute capacity translates to an estimated 3 million to 6 million GPUs—an enormous order by any standard.
Still, AMD’s data center business isn’t a one-trick pony. The company’s AI GPUs are in demand from a range of customers, and Su remains bullish on the future. She forecasted that “AMD’s data center revenue could grow by 60% annually over the next three to five years, with AI hardware sales alone bringing in tens of billions of dollars per year from 2027 onward.” Of course, as The Motley Fool points out, these rosy projections factor in the OpenAI deal. Should OpenAI falter, AMD’s growth trajectory could be less spectacular than hoped.
Investors are now faced with a classic dilemma: Is the recent dip in AMD’s stock a buying opportunity, or a sign to exercise caution? On the one hand, AMD’s non-GAAP earnings for 2025 came in at $4.17 per share, giving the stock a price-to-earnings (P/E) ratio of 49.9. That’s a bit steeper than Nvidia’s P/E ratio of 43.5, based on its trailing-12-month adjusted earnings. As The Motley Fool notes, “AMD stock still isn’t cheap despite its recent correction,” especially given that Nvidia is outpacing AMD in both data center revenue and growth.
On the other hand, if Su’s predictions hold true and AMD’s data center business accelerates as expected, the current valuation could look like a bargain in hindsight. The key, as many analysts suggest, may be patience. The AI hardware market is notoriously volatile, and with so much riding on a single customer, even a company as innovative as AMD is vulnerable to the shifting sands of investor confidence and industry partnerships.
Meanwhile, AI-generated trading signals released on February 8, 2026, for Advanced Micro Devices CDR (CAD Hedged) (AMD:CA) add another layer to the story. According to these signals, the long-term outlook for AMD:CA is strong, with a recommended buy near 38.27 CAD and a target of 44.71 CAD. The short-term and mid-term ratings, however, are weak, suggesting that volatility and uncertainty may persist in the near future. The trading plan also recommends a stop loss at 38.08 CAD for long positions and at 44.93 CAD for shorts, underscoring the need for caution in the current environment.
In the end, AMD’s journey through the AI revolution is emblematic of the broader tech landscape: high stakes, rapid innovation, and no shortage of risk. The company’s fortunes are tied not only to its own engineering prowess but also to the financial health and strategic decisions of its partners and customers. As the dust settles from its latest earnings report and the industry waits to see whether OpenAI can deliver on its commitments, one thing is clear—AMD’s next chapter will be closely watched by investors, competitors, and tech enthusiasts alike.