AMD stock will rocket after $100B AI chip deal with Meta?

New York, 27 February 2026: The American stock market saw a sharp drop today, Friday. Due to hot inflation figures (PPI) and concerns related to artificial intelligence (AI), investors turned away from risky shares. The Dow Jones Industrial Average (DJI) fell 715 points or 1.5% to close at 48,721.66. The S&P 500 index dropped 1.1% to 6,843.16, while the Nasdaq Composite slipped 1.4% to 22,620.85. This happened in the last trading session of the month, with the S&P 500 heading for a drop of more than 1% in February, which has only happened twice in the past ten months.

The main reason for the drop in the market

The main reason for today’s drop is the Producer Price Index (PPI) in the US. In January, PPI rose by 0.5%, which is more than the expected 0.3%. The core PPI jumped by 0.8%, double the expected 0.3%. This data has sparked concerns among investors that the Federal Reserve might delay cutting interest rates. Additionally, worries about the impact of AI technology on jobs and businesses have increased. Block, the company that owns Square and Cash App, announced it would lay off 40% of its staff due to AI, causing unrest in the tech sector.

There was a sharp decline in tech shares on Wall Street. Many companies in the Nasdaq index were caught up in concerns over the AI bubble. However, oil prices rose, bringing a slight positive outlook to the energy sector. Overall, the market reached the end of February’s volatility, marking its worst performance since last April.

Mega deal between AMD and Meta: Part of AI buildout

Against the backdrop of this decline, the 6-gigawatt GPU deal between AMD (Advanced Micro Devices) and Meta Platforms (the parent company of Facebook) has become a topic of discussion. According to this agreement announced three days ago (24 February), AMD will supply Meta with Instinct GPUs with a capacity of 6 gigawatts, with a total value that could reach up to 100 billion dollars. The agreement is for five years, and the shipment of the first gigawatt deployment will begin in the second half of 2026. This includes custom AMD Instinct MI450 GPUs and Venice CPUs.

Due to this deal, AMD’s shares jumped more than 9% after the announcement, closing at 213.84 dollars. However, in today’s market decline, AMD’s shares fell by 3.41% to 203.68 dollars. This deal gives AMD a strong position against competitors like Nvidia, as Meta is now purchasing AI chips from Nvidia, AMD and Google. According to discussions on X (formerly Twitter), this deal highlights the shortage of AI hardware and emphasises challenges such as power and cooling.

Current level of AMD stock and analysts’ opinions

AMD stock is trading at $203.68 today, down $7.18 during the day. Trading volume is normal, but market pressure shows fluctuations between low and high levels. Since the beginning of 2026, AMD shares have decreased by 4.31%, yet they have increased by 30.90% over the past six months and 105.69% over the year.

Wall Street analysts are positive on AMD. According to 40 analysts, the average target price is $290.53, which is 42.64% higher than the current price. The high target is $380 and the low is $220. Kevin Cassidy of Rosenblatt Securities has given a ‘buy’ rating with a $300 target, indicating a 40% upside. Bleyne Curtis of Jefferies has also maintained a ‘buy’ rating with a $300 target. According to analysts, the Meta deal strengthens AMD’s AI roadmap and earnings are expected to increase by 59% by 2026.

Will AMD shares give good returns? According to analysts’ targets, yes in the long term, but there is short-term risk due to market volatility and inflationary pressures. AMD’s position is strong due to growth in the AI sector and major clients like Meta, but the impact of competitors such as Nvidia should be considered.

Overall market perspective

The American market remained volatile in February. Although there is enthusiasm in the AI sector, investors remain cautious due to uncertainties regarding inflation and interest rate cuts. OpenAI’s $110 billion funding round increased excitement in the AI sector, but AI-driven changes by companies like Block have raised concerns.

For Indian investors, this dip in the American market could be a buying opportunity, especially in AI-focused companies like AMD. However, it is necessary to keep an eye on the Federal Reserve’s upcoming decisions. According to market experts, 2026 will be a growth year for the AI and tech sector, but controlling inflation will remain the main challenge.

(Source: Based on various economic reports and analyses. This is just for information, not investment advice.)