AMD and Meta’s “10% equity for 100 billion order” deal, Goldman Sachs: We need to see actual deployment to have more confidence.

Regarding AMD and Meta's "10% equity for 100 billion order," Goldman Sachs stated that it is not willing to give a more positive rating until seeing the actual deployment progress of Meta and OpenAI.

On February 24, WallstreetCN article pointed out that AMD and Meta announced a five-year strategic partnership, with Meta set to deploy 6GW of AMD GPUs. In exchange, AMD will provide up to 160 million performance-based warrants (about 10% equity).

On February 25, according to Zhui Feng Trading Desk, Goldman Sachs noted in its latest research report that this cooperation significantly enhances AMD’s position in the accelerator market, also marking a major advance in its competition with giants like Nvidia. However, Goldman emphasized that it will only adopt a more positive stance on AMD upon seeing the actual deployment schedule of Meta and OpenAI, maintaining a “neutral” rating on AMD and raising the target price to $240.

Strategic Partnership Details: Equity for Orders

Goldman stated that the core logic of this deal is: Meta exchanges potential equity for AMD's deep customization services and long-term supply commitment, while AMD exchanges future equity dilution for definite orders and market endorsement from a top-tier hyperscale cloud company.

Goldman noted that, in terms of financial structure, this cooperation is very similar to the OpenAI deal announced in October 2025. The transaction includes up to 160 million performance-based warrants for AMD common shares (about 10% ownership). These warrants will vest in batches as deployments complete and share price thresholds are met (the last batch vests when 6GW is deployed and share price reaches $600).

Goldman pointed out that as part of the agreement, AMD is designing a semi-custom MI450 GPU tailored specifically for Meta workloads. AMD expects initial shipments to begin in the second half of 2026 and anticipates the cooperation will boost non-GAAP earnings per share (EPS).

Goldman believes this announcement is a major positive for AMD, as it provides greater certainty for the company’s market share position among Tier-1 hyperscale cloud service providers. Due to equity ownership and product customization, Meta has strong incentives to use AMD products.

At the same time, Goldman pointed out that the increased competition intensity among key customers makes this announcement a slight negative for Nvidia and Broadcom.

Maintaining “Neutral” Rating: Awaiting Actual Deployment

Despite broad prospects for cooperation, Goldman currently maintains a “neutral” rating on AMD. Goldman noted that AMD’s significant risk exposure to OpenAI and higher operating expenses (OpEx) are the main reasons for maintaining the neutral rating.

Goldman stated that if it can gain more confidence in Meta and OpenAI’s deployment schedule before 2027, it may consider taking a more constructive stance.

Based on the incremental contribution from Meta’s strategic cooperation, Goldman raised its non-GAAP EPS forecasts (excluding stock-based compensation, SBC) for AMD in 2027 and 2028 by about 16% and 17%, respectively.

Specifically, 2027 EPS forecast was raised from $10.00 to $11.55, and 2028 EPS forecast from $11.75 to $13.70.

Goldman raised AMD’s 12-month target price from $210 to $240, based on a 28x earnings multiple (lower than the previous 30x due to peer multiple declines) applied to the standardized EPS forecast of $8.50 (up from $7.00).

~~~~~~~~~~~~~~~~~~~~~~~~

The above highlights are from Zhui Feng Trading Desk.

For more detailed analysis, including real-time interpretation, frontline research and more, please join [Zhui Feng Trading Desk ▪ Annual Membership]

Risk Warning and DisclaimerThe market carries risks; investments need caution. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment goals, financial conditions, or needs. Users should consider whether any opinions, views, or conclusions herein fit their specific circumstances. Investing accordingly is at your own risk.