A major cloud infrastructure provider has placed a colossal order for Advanced Micro Devices’ (AMD) latest accelerators, signaling a significant shift in the competitive landscape of artificial intelligence hardware. While Nvidia has long commanded the arena, this deal demonstrates robust market demand for AMD’s competing solutions and poses a question about the sustainability of any single vendor’s dominance.
Strategic Partnership with Vultr Targets Cost Efficiency
The cloud service provider Vultr announced on Wednesday the construction of a new AI supercluster in Springfield, Ohio. The facility, powered by a 50-megawatt data center, will incorporate 24,000 AMD Instinct MI355X GPUs. The total value of this deployment exceeds one billion US dollars, with operations scheduled to commence in early 2026.
Vultr’s stated objective is to slash computing costs by approximately half compared to offerings from the largest hyperscale cloud providers. This value proposition is particularly aimed at mid-sized AI developers seeking more affordable alternatives to Nvidia’s H100 or Blackwell-based systems. For AMD, the agreement translates into a substantial, direct revenue stream and serves as a powerful market signal that its MI300 series and forthcoming MI355 generation are being taken seriously by major buyers.
Expanded Alliance with HPE Provides Long-Term Roadmap Support
Concurrently, AMD has deepened its strategic partnership with Hewlett Packard Enterprise (HPE). The collaboration centers on HPE’s “Helios” architecture, an open rack-scale AI system that integrates AMD EPYC processors with Instinct accelerators. HPE has scheduled the global rollout of these systems for 2026, aligning with the anticipated launch timeline of AMD’s MI400 series.
This expanded relationship not only secures vital distribution channels for AMD but also enhances product cycle predictability. The commitment of a hardware integrator of HPE’s scale to align its long-term roadmap with AMD’s technology underscores growing confidence in the performance and viability of AMD’s chip portfolio.
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Analyst Consensus Points to Substantial Upside
Following the news, TD Cowen reaffirmed its buy rating on AMD shares. Analyst Joshua Buchalter established a price target of $290, representing a potential gain of roughly 35% from the current level near $217. The broader analyst consensus is overwhelmingly positive: 80.4% recommend buying the stock, while 19.6% advise holding. There are currently no sell recommendations.
Although the valuation remains ambitious with a price-to-earnings ratio exceeding 106, the growth momentum in the data center segment provides justification. During the UBS Global Technology and AI Conference on December 3, CEO Dr. Lisa Su confirmed that the data center business’s contribution to total revenue has surged from below 20% to nearly 50% for 2025.
ZAYA1 AI Model Demonstrates Technical Prowess
Beyond commercial wins, AMD has also delivered a technical proof point. The company’s newly introduced “ZAYA1” AI foundation model was trained exclusively on its MI300X GPUs. According to verifiable data, ZAYA1 achieves memory write speeds ten times faster than Meta’s reference model, Llama-3-8B.
This achievement directly counters a persistent market perception that AMD’s hardware is only suitable for AI inference tasks, not for training complex foundational models. The ZAYA1 demonstration effectively disproves this notion and may foster additional confidence among research institutions and AI startups considering AMD’s platform.
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