AMD shares rose just over 13 percent on Monday after the chipmaker said its fifth generation EPYC processors will power Google Cloud’s new TPU 8tx system for artificial intelligence. The stock closed at $508.58, a gain of 13.26 percent on the session, after opening at $473.39 and touching a high of $515.18. The move followed an announcement from AMD that its server chips will provide the host infrastructure for Google’s new confidential computing system. Alphabet shares also rose, adding 3.16 percent to close at $293.77, while Nvidia fell 4.27 percent to $178.67.
The deal puts AMD shares inside one of Google’s most closely watched products. The TPU 8tx is one of two additions to Google’s eighth generation tensor processing units announced on Monday, and it is the first cloud TPU with hardware based confidential computing. AMD’s Secure Encrypted Virtualization keeps data and model weights isolated even while a model is running, which is what regulated buyers such as banks and government agencies need. Google said the systems will become available in 2027. Neither company disclosed the value of the agreement, expected volumes or pricing.
AMD shares rise on analyst upgrade
AMD shares also drew support from Wall Street on Monday. Oppenheimer analyst Rick Schafer raised the stock to Outperform from Perform and set a $600 price target, projecting data center sales to rise 135 percent next year. The upgrade landed the same morning as the Google Cloud announcement, and the firm tied the call to AMD’s third quarter results rather than to the Google deal. AMD reported record revenue of $13.4 billion for the third quarter on 3 November, up 45 percent from a year earlier, with data center revenue of $8.5 billion, up 97 percent. Earnings per share were $2.09.
The rally came after a rough week for AI stocks. The Nasdaq rose more than 2 percent on Monday as buyers returned to beaten down semiconductor and hardware names after the sector’s steepest one day drop in 19 months. AMD shares had already gained 11.3 percent three days earlier on the same buying. The stock is up about 122 percent since the start of the year, though it still trades below its 52 week high of $658.52 reached on 6 October. TipRanks put the Wall Street consensus at Strong Buy, based on 28 Buy ratings and four Hold ratings over the past three months.
What the AMD shares rally still has to prove
The AMD shares rally still has to clear two tests. AMD has guided to about $17 billion of revenue for the December quarter, plus or minus 3 percent, with data center sales above 60 percent of the total. The second test is whether Google names customers for the 8tx and gives dates for availability in 2027, the first read on whether regulated buyers pay for confidential computing. A single day jump of 13.26 percent reflects sentiment and expectations, not delivered revenue, and the deal’s value is still unknown.
For AMD, the Google deal extends a run of data center wins. The company’s fifth generation EPYC chips, built on the Turin and Zen 5 architecture, already power large cloud systems, and the TPU 8tx puts them at the center of Google’s pitch to regulated customers. Google built its TPUs to avoid buying Nvidia accelerators, and it moved them onto its own processors in April before turning back to AMD for the one layer it had left out: confidential computing. Investors pushed AMD shares higher on the news, and the next numbers that matter are the December quarter results, due in February.
AMD shares ended the day as the strongest of the large chip stocks, with the gain far outpacing the wider market. The company said its EPYC processors will serve as the host foundation for Google Cloud TPU 8tx, establishing hardware enforced confidential computing for cloud AI systems. Investors will now watch for named customers and delivery dates in 2027, and for the December quarter revenue of about $17 billion that AMD has guided to. Until then, the 13 percent jump is a bet on a deal with no price tag.