Amd Deal With Meta Sends AMD Stock Up After 6-Gigawatt GPU Pact
amd will issue Meta 160 million shares of common stock as part of a multiyear agreement under which Meta will purchase upward of 6 gigawatts of AI chips, the companies announced Tuesday, a deal that pushed AMD shares as much as 10% higher in premarket trading before those gains narrowed in the regular session.
Amd will issue 160 million shares tied to shipment milestones
Under the pact, AMD will issue Meta 160 million shares that vest in a series of tranches if AMD hits specified milestones, with the first vesting tied to AMD shipping its first 1 gigawatt of chips. AMD CFO Jean Hu said, “We expect this partnership to drive substantial multi-year revenue growth and be accretive to our non-GAAP earnings per share, marking another significant step forward in delivering on our ambitious long-term financial model. ” She added, “The performance-based structure also tightly aligns AMD and Meta around execution and long-term value creation. ”
MI450 GPUs, Helios racks and EPYC CPUs arriving in second half of the year
The first GPUs from the deal will be AMD’s MI450 line, scheduled for deployment in Meta’s Helios rack-scale data center systems, complete with EPYC CPUs, in the second half of the year. Meta also said it will buy a large number of additional CPUs, including AMD’s Venice chip and its next-generation Verano processor.
Meta’s broader chip strategy: Nvidia agreement and CPU plans
Last week Meta struck a separate multiyear agreement with Nvidia that will deliver millions of Blackwell and Rubin GPUs. Nvidia said Meta will host the first large-scale deployment of its Grace CPU servers; Nvidia typically pairs a Grace CPU with two Blackwell or Blackwell Ultra processors to form GB200 and GB300 superchips that slot into rack-scale platforms.
Market reaction and the spending backdrop
AMD shares rallied as much as 10% in premarket trading before trimming those gains in the regular session. The Meta deal arrives as Meta plans to spend upwards of $135 billion in capital expenditures throughout 2026 for data center construction, chips and model training. Industry-wide, Meta, Amazon, Google and Microsoft plan to spend roughly $650 billion on AI.
Questions about custom chips and recent industry moves
Investors have expressed pause about whether the massive investments will pay off. Meta has fared best of the big spenders, with shares down just 2. 5% since it reported earnings on Jan. 28 and unveiled its investing plans; Google shares have dropped 8. 7%, Amazon 11. 9% and Microsoft 15. 5% over the same stretches. Wall Street has cooled on chip stocks amid concerns about an AI bubble and the prospect that custom chips built by Amazon, Google, Meta and Microsoft could threaten GPU supremacy in data centers.
Reports of Meta talks with Google and analyst views
In November, The Information reported that Meta was in talks with Google to use its TPU chips for AI applications. Analysts cited in the coverage say it will be difficult for TPU-style chips to supplant the more general-purpose AI processors that Nvidia and AMD build.
The first confirmed commercial hinge in the AMD–Meta deal is shipment of the initial 1 gigawatt of chips, which will trigger the first tranche of the 160 million shares. The first MI450 GPUs are slated to be installed in Helios racks in the second half of the year, and Meta’s separate agreement with Nvidia for millions of Blackwell and Rubin GPUs was announced last week. For contact on the original coverage, Daniel Howley can be reached at dhowley@yahoofinance. com and on Twitter at @DanielHowley.
