For the last few years, investing in AI infrastructure meant one thing: Nvidia. While the company is a juggernaut in the space, though, another chipmaker is set to give investors a reason to take a second look in 2025.
That company is Advanced Micro Devices, or AMD.
The investment thesis for AMD is simple: The company doesn't have to unseat Nvidia as the dominant force in AI accelerators to become a great investment. The company's opportunity comes in its ability to capture a meaningful chunk of a rapidly expanding AI market.
The Numbers Behind AMD
AMD came into 2025 as a major semiconductor company, but its opportunity in the space for AI has changed the game for investors.
AMD posted a second-quarter revenue of $7.69 billion in revenue, a 32% increase year over year. Its Data Center segment generated $3.17 billion, up 14% year over year, while the company reported $872 million in net income. (amd.com)
The most interesting part of the story, however, came this two days ago.
AMD announced a deal with OpenAI under which OpenAI plans to deploy up to 6 gigawatts of AMD GPUs. The deal also contains a warrant for OpenAI to purchase up to 160 million AMD shares, subject to certain milestones being met. (amd.com)
That is not just another deal for a customer. It is a sign of strength for AMD's ability win mindshare in the burgeoning AI computing space.
Why This Could Be a Big Deal
Nvidia's advantage is not limited to its powerful offerings. Its CUDA software has created a massive barrier for entry for other companies hoping to disrupt the space.
AMD, then, faces a challenge: Its products need to be compelling enough that major customers are willing to invest the time and money it takes to migrate to a new ecosystem.
The OpenAI deal suggests that it is happening.
AMD also has an opportunity to benefit from customers looking to buy from multiple suppliers. The largest technology companies in the world are spending massive amounts of money on AI infrastructure. The concentration of that spending among one supplier creates both a pricing risk and a supply chain risk. For AMD, even capturing a small part of the spending would create billions of dollars in additional revenue for the company.
The Risks
The biggest risk is that investors get ahead of the business. AMD's stock jumped 62% during October, the best monthly gain since 2001, after the OpenAI announcement. (tipranks.com). The company has an incredibly high hurdle to clear if the rally proves to be misplaced.
If AMD fails to capture meaningful AI market share, though, investors can reverse course with equal ease. There's also Nvidia, itself. AMD is trying to disrupt a company with deep pockets, a ready ecosystem of software and a commanding position in the market for AI accelerators.
AMD does not need to win the battle for AI supremacy. Instead, the company needs only to show that there is room for two winners. For investors, AMD is one of the most intriguing stories to watch in the next stage of AI's rise.
