AMD’s stock climbs, and a new Microsoft deal is only part of the reason

“Customers are looking for AI infrastructure that is optimized for a wide range of workloads, from training and inference to data preparation, search, and reinforcement learning,” Microsoft CEO Satya Nadella said in a release.

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Baptista Research analyst Ishan Majumdar also attributed AMD’s Monday rally to a “broader recovery across semiconductor and AI-related stocks.”

As for the Microsoft deal, “what makes this more significant than a routine cloud partnership is its breadth,” he noted, pointing out that Microsoft plans to expand its use of a variety of AMD offerings beyond Helios.

Majumdar said the deal marks an “important commercial endorsement” for AMD, as it shows the company is able to offer an “integrated AI-infrastructure platform rather than competing with Nvidia solely at the individual-chip level.”

That said, he noted financial terms or deployment volumes weren’t disclosed and that Microsoft continues to use multiple chip suppliers.

Majumdar believes AMD’s move on Monday reflects more of a “strategic validation” and indication of a future revenue pipeline, as opposed to an “immediate quantifiable earnings contribution.”

Investors may also be excited by reports from SemiAnalysis saying that AMD may soon announce Anthropic as a customer, Morningstar analyst Brian Colello told MarketWatch.

AMD is holding its annual “Advancing AI” event on Thursday in San Francisco, at which Colello believes the company could release more details on its partnerships.

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