New York, Feb 25, 2026, 16:01 EST — Market closed.
- AMD fell 1.5% on Wednesday after jumping 8.8% the prior session on a Meta AI infrastructure deal.
- The agreement includes a performance-based warrant for up to 160 million AMD shares tied to shipment milestones and stock-price targets.
- Traders are looking for a read-through on AI chip demand from Nvidia results due after Wednesday’s close.
Advanced Micro Devices shares closed down 1.5% at $210.74 on Wednesday, giving back some of the previous session’s surge after the chipmaker unveiled a large AI supply deal with Meta Platforms. The stock ended Tuesday up 8.8% at $213.84. (Investing)
The pullback matters because the Meta pact is the kind of hyperscaler commitment AMD has chased in data-center graphics processors, but it comes with an unusual sweetener that could dilute shareholders. Investors are now sorting the revenue promise against what AMD gave up to secure it.
AMD and Meta said they agreed to a multi-year, multi-generation partnership to deploy up to 6 gigawatts of AMD Instinct GPUs for Meta’s next generation of AI infrastructure, with shipments for the first gigawatt expected to begin in the second half of 2026. AMD Chief Executive Lisa Su said the deal would help “place AMD at the center of the global AI buildout,” while Meta CEO Mark Zuckerberg said the partnership would help Meta “diversify our compute.” (SEC)
In an SEC filing, AMD said it issued Meta a performance-based warrant to buy up to 160 million AMD shares at an exercise price of $0.01 each. Warrants are similar to options, giving the holder the right to buy shares later at a set price. AMD said the shares vest in tranches tied to shipment milestones, and also depend on AMD hitting escalating stock-price thresholds that rise to $600 for the final tranche; the warrant runs until Feb. 23, 2031. (SEC)
Wall Street’s early takes were mixed. Evercore ISI analyst Mark Lipacis lifted his price target, while KeyBanc’s John Vinh said the structure could help “secure Meta’s commitment.” Jefferies analyst Blayne Curtis warned some of the upside was “already baked in,” even as the deal boosted confidence in AMD’s AI plan. (TipRanks)
The timing is not accidental. Meta has been leaning harder into AI data centers, and in late January it forecast 2026 capital expenditures of $115 billion to $135 billion as it pushes its “superintelligence” effort, Reuters reported. (Reuters)
Semiconductors have swung sharply around AI headlines, and the broader chip complex has held up even as single names whipsawed. The Philadelphia Semiconductor Index rose about 1.7% on Wednesday after a 1.5% gain on Tuesday, according to Investing.com data. (Investing)
Still, the fine print leaves room for disappointment. The deployment starts late, and AMD must execute on custom silicon, systems integration and supply at scale before the headline “gigawatt” numbers translate into steady revenue.
There is also plain dilution risk. If Meta ultimately earns and exercises the warrant, AMD’s share count would rise, and investors could face years of debate about how much of the deal’s economics were effectively paid back in equity.
What the market watches next is Nvidia’s quarterly report after Wednesday’s close for signals on AI chip orders and pricing, with traders looking for a read-through to AMD and its peers ahead of Thursday’s U.S. session. (Investing)
