Street View: AMD, OpenAI deal seen paving way for broader hyperscale adoption

** AMD AMD will supply artificial intelligence chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the ChatGPT creator the option to buy up to roughly 10% of the chipmaker

** Shares up 1.7% at $207.2 premarket

PARTNERSHIP TO BOOST AMD'S AI AMBITIONS

** Melius Research ("buy," PT: $300) says a successful partnership with OpenAI will help AMD attract more hyperscale customers who would be more likely to adopt AMD's AI software for their own use

** Benchmark ("buy," PT: $270) says the agreement fundamentally shifts how the industry views AMD's competitive position going forward

** Morgan Stanley ("equal-weight," PT: $246) says "having the largest customer in the world committed to AMD's success can really matter in terms of turning this into a commercial success"

** TD Cowen ("buy," PT: $195) notes the deal validates AMD's AI hardware and software as well as its roadmap going forward

** "OpenAI is the largest wallet, but endorsement potentially drives broader customer engagement for AMD's AI offerings" - TD Cowen

** Piper Sandler ("overweight," PT: $240) says AMD's supply chain is well-positioned to support the agreement after spending several years in preparation to meet large-scale GPU, CPU and networking demand