New AMD Price Target After Meta Deal's Multi-Billion Dollar Projection

The Sarge-folio needed some good news. The fact that the good news forced a significant pop on a top-three portfolio name (in terms of weighting) was a gift. 

Just one week after Meta Platforms (META)  announced a huge commitment to use Nvidia (NVDA)  processors to power the firm's expansion into artificial intelligence, the social media giant announced another huge chip deal, this time with Advanced Micro Devices (AMD) . 

I've said it before: All hail AMD CEO Lisa Su, the queen of Queens — the New York City borough of Queens, that is.

Meta Platforms, on Tuesday informed interested parties that the multi-year deal with AMD involves the deployment of more than 9 gigawatts of graphics processing units (GPUs) as well as central processing units of CPUs. AMD will ship Helios rack-scale servers later in 2026. The GPUs will be custom-made for Meta and based on the MI450 architecture. The CPUs will be sixth-generation EPYCs running ROCm software.

Under the terms of the deal, AMD has issued to Meta a performance-based warrant for up to 160 million common shares of AMD stock. The warrant will be structured to vest as specific milestones associated with "Instinct" GPU shipments are achieved. Full financial terms of this deal were not released. Ben Bajarin of Creative Strategies, who was interviewed at CNBC, estimated that it's worth tens of billions of dollars over at least four years.

CEO Lisa Su

On this news, Su made the following public comment: 

"This multi-year, multi-generation collaboration across Instinct GPUs, EPYC CPUs, and rack-scale AI systems aligns our roadmaps to deliver high-performance, energy-efficient infrastructure optimized for Meta’s workloads, accelerating one of the industry’s largest AI deployments and placing AMD at the center of the global AI buildout."

The Chart​

I showed readers this developing flat base about three weeks ago. At that time, we thought we were looking at a double-top ​pattern of bearish reversal. Then we thought that we were looking at perhaps something close to a triple-bottom pattern of bullish reversal. In reality, the stock was building a base. Note that the 200-day SMA has never been challenged.

The indicators are not pretty. Relative strength is still relatively weak. The daily MACD is still postured bearishly with all three components mired below the zero bound and with the 12-day EMA running below the 26-day EMA. That said, once the opening bell rings, these indicators will improve in appearance.

What matters on Tuesday is if AMD can take and hold either or both its 21-day EMA (to get the swing crowd on board) and 50-day SMA (to provoke expanded exposure among professional portfolio managers). Don't forget, AMD did leave an unfilled gap in its wake in early February that would require a tick at or above $252.65 to fill. 

What do we know? That unfilled gaps do not have to be filled, but (and this is a big but) they usually do.

Advanced Micro Devices (AMD)

Target Price: $274 (down from an unrealistic $320 that I had never revised publicly)

Pivot: 50-day SMA (currently $219)

Add: Down to 200-day SMA (currently $184)

Panic: Loss of 200-day SMA

At the time of publication, Guilfoyle was long AMD and NVDA equity.