AMD's stock climbs, and a new Microsoft deal is only part of the reason

By Hannah Pedone

Chip stocks were broadly recovering Monday, and AMD investors are gearing up for a big product event later in the week

Shares of Advanced Micro Devices were up 4% Monday after an announced partnership with Microsoft.

Advanced Micro Devices is further entrenching itself with Big Tech customers - and investors are cheering even without knowing the financial details of the company's latest deal extension.

Shares of AMD (AMD) were up 4% on Monday after the company announced a expanded partnership with Microsoft (MSFT), whereby the software giant will deploy AMD's Helios solutions for inference work involving frontier models, Azure artificial-intelligence services and customer applications.

"Customers are looking for AI infrastructure that is optimized for a wide range of workloads, from training and inference to data preparation, search, and reinforcement learning," Microsoft CEO Satya Nadella said in a release.

See also: Chip stocks have entered a bear market. A BofA analyst says not to panic.

Baptista Research analyst Ishan Majumdar also attributed AMD's Monday rally to a "broader recovery across semiconductor and AI-related stocks."

As for the Microsoft deal, "what makes this more significant than a routine cloud partnership is its breadth," he noted, pointing out that Microsoft plans to expand its use of a variety of AMD offerings beyond Helios.

Majumdar said the deal marks an "important commercial endorsement" for AMD, as it shows the company is able to offer an "integrated AI-infrastructure platform rather than competing with Nvidia solely at the individual-chip level."

That said, he noted financial terms or deployment volumes weren't disclosed and that Microsoft continues to use multiple chip suppliers.

Majumdar believes AMD's move on Monday reflects more of a "strategic validation" and indication of a future revenue pipeline, as opposed to an "immediate quantifiable earnings contribution."

Investors may also be excited by reports from SemiAnalysis saying that AMD may soon announce Anthropic as a customer, Morningstar analyst Brian Colello told MarketWatch.

AMD is holding its annual "Advancing AI" event on Thursday in San Francisco, at which Colello believes the company could release more details on its partnerships.

-Hannah Pedone

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07-20-26 1324ET