AMD: Meta's $100 Billion AI Chip Deal Reshapes the Bull Case
Advanced Micro Devices (NASDAQ: AMD) is having a defining week. Shares surged 8.8% on February 25, 2026, to $213.84, after the semiconductor giant announced a landmark $100 billion AI chip supply agreement with Meta Platforms — a deal that cements AMD's position as a credible second source in the accelerated computing arms race. The stock now trades at a $349 billion market cap, well above its 52-week low of $76.48 but still 20% below its 52-week high of $267.08, leaving investors to weigh whether the Meta deal justifies a re-rating or whether the dilutive warrant structure tempers the upside. AMD's fiscal year 2025 told two distinct stories. Revenue soared 38% year-over-year to $34.6 billion, driven by explosive Data Center GPU demand, while full-year free cash flow nearly tripled to $6.74 billion. Yet the stock's trailing P/E of roughly 82x and an EV/EBITDA above 120x signal that the market is pricing in substantial future growth — growth that now hinges on the successful ramp of next-generation MI450 GPUs and Helios rack-scale systems through 2026 and 2027. For individual investors, AMD represents one of the most consequential risk-reward decisions in the semiconductor space today. The company is no longer merely an underdog chasing Nvidia; it is an AI infrastructure platform play with a clear path to $80+ billion in annual revenue by 2028. The question is whether that trajectory is already priced in — and whether the Meta warrant structure, which could issue up to 160 million new shares, dilutes the per-share economics enough to give pause.