AMD is now worth more than 1 trillion dollars. Two of the companies that buy its chips have the right to buy a large piece of AMD itself, at 1 cent per share.
AMD, or Advanced Micro Devices, is an American company that designs the processors and AI chips that sit inside data centres, laptops and gaming consoles. In AI chips, it is the closest competitor Nvidia has.
Interestingly, that rivalry runs in the family, because Lisa Su, who runs AMD, and Jensen Huang, who runs Nvidia, are first cousins once removed. And the two companies they run are worth about $6.5 trillion between them.
So, the two biggest names in AI chips are now run by cousins.
Coming back to the two companies who have the right to buy AMD’s shares, they are OpenAI and Meta, both of which are its customers.
That right to buy is called a warrant, which is a promise that lets someone buy shares later at a price fixed today. The price AMD fixed was 1 cent per share.
Ordinary AMD shares closed at $612.46 on Monday. If the conditions in the deal are met, the two customers can buy up to 320 million shares at a cent each, which is close to 1/5th of the company.
Now you may be wondering why an Indian investor should care. Well, let us tell you why.
Open your portfolio and check whether you own an S&P 500 fund. For instance, AMD made up 1.16% of the Vanguard S&P 500 ETF, VOO, in its latest published holdings.
A rally in chip shares therefore moves an index fund on its own. VOO’s ten largest holdings account for 37.81% of the fund, and three of those ten are chipmakers.
The warrants matter in the other direction, because if AMD hands those 320 million shares over, the company is split into more pieces. Every share anyone already holds then becomes a smaller slice of it.
That kind of arrangement can be like a double-edged sword. Before we move into the deets of the AMD story, let’s go back in time.
What history tells AMD
More than twenty years ago, another American company found a way to help its own customers pay for its equipment.
Lucent Technologies made the switches and cables that carried America’s phone calls and internet traffic.
During the telecoms boom of the late 1990s, Lucent put up about $8.1 billion to help its customers afford the equipment it was selling them. That figure comes from an analysis of Lucent’s accounts published by Gregory Blotnick in November 2025.
The arrangement worked while the customers were growing. Lucent booked the sales, the customers got their equipment, and the loans sat on Lucent’s books as something it expected to be paid back.
Then the telecoms companies ran out of money. Equipment makers wrote off billions of dollars of loans.
The US market regulator SEC later charged Lucent over its accounting. The regulator found that Lucent had granted customers side agreements, credits and other incentives to get them to buy.
SEC also said that it had improperly recognised about $1.148 billion of revenue in its 2000 financial year, and Lucent paid a $25 million penalty to settle.
However, AMD lends nobody money and hands over shares instead, which has a similar effect on what its customers end up paying for the chips.
So, you may be prompted to ask:
How much of AMD’s trillion dollars rests on orders it helped pay for?
The day AMD joined the $1T club
AMD shares closed at $612.46 on Monday, 21 September, after touching an all-time high at the time of $613.92 during the session.
The stock rose about 9% and its market value passed $1 trillion for the first time.
That capped a five-day run of roughly 24%. AMD became the fourth American chipmaker to cross a trillion dollars, after Nvidia, Broadcom and Micron.
Source: AMD on Vested
AMD made no announcement that day, and almost the whole sector moved together. Intel rose 12%, Arm rose 17%, and the Nasdaq Composite closed at a record 27,122.09, up 2.3%.
Two outside numbers did most of the work. US crude oil fell 4.8% to $95.50 a barrel on hopes of talks between the US and Iran. The 10-year US Treasury yield eased to about 4.96%, which lowers the cost of holding shares priced on distant profits.
What’s behind the price
AMD’s most recent results, published on 4 August, were the best in its history. Revenue was $11.5 billion, up 50% from a year earlier, and net income was $2.3 billion.
Data centre revenue, the part that sells AI chips and server processors, was $6.7 billion, more than double the year before. Gross margin reached 54%.
| AMD, Q2 2026 | Amount | Change vs a year earlier |
| Revenue | $11.5 billion | Up 50% |
| Data centre revenue | $6.7 billion | Up 107% |
| Net income | $2.3 billion | Up 163% |
| Diluted earnings per share | $1.38 | Up 156% |
| Gross margin | 54% | Up from 40% |
Source: AMD, second quarter 2026 results
Lisa Su, AMD’s chair and chief executive, said the company had –
“[…] delivered an excellent quarter, with record revenue and profitability as Data Center revenue more than doubled year-over-year”.
AMD guided to about $13 billion of revenue in the current quarter, plus or minus $300 million.
Differences across the leaderboard
The four chipmakers worth more than a trillion dollars are priced very differently from one another.
Nvidia is worth $5.49 trillion, earned $302.97 billion of revenue over the past twelve months, and trades at about 29 times its earnings.
Micron is worth $1.22 trillion on $90.27 billion of revenue, at about 24 times earnings.
Broadcom sits between them at $1.71 trillion, on revenue of $89.10 billion, at about 47 times earnings. It sells about as much in a year as Micron does and is worth roughly $500 billion more.
Now, AMD is worth $1.01 trillion on $41.31 billion of revenue, at about 157 times earnings, according to stockanalysis.com on 22 September.
Among the four it has the smallest sales and the highest price for every dollar of profit. Make of it what you will.
| The trillion-dollar chipmakers | Market value | Price to earnings (approx.) |
| Nvidia | $5.49 trillion | 29x |
| Broadcom | $1.71 trillion | 47x |
| Micron | $1.22 trillion | 24x |
| AMD | $1.01 trillion | 157x |
Source: stockanalysis.com, 22 September 2026
What’s up with OpenAI
In October 2025, AMD agreed to sell OpenAI its AI chips that will use 6 gigawatts of power. As part of the deal, AMD gave OpenAI the right to buy (warrants) up to 160 million AMD shares at $0.01 each. The details come from AMD’s filing with the SEC.
OpenAI gets these shares in stages, and each stage unlocks only when two conditions are met:
- OpenAI must start using more of the chips.
- AMD’s share price must rise to a set level, ending at $600 for the last stage.
In February 2026, AMD signed the same type of deal with Meta, for up to 6 gigawatts of chips and another 160 million shares. The first batch of chips for Meta is due to ship in the second half of 2026.
And that streak continues.
| AMD customer deal | Announced | Size | What AMD gave alongside |
| OpenAI | 6 October 2025 | Up to 6 gigawatts | Warrant for up to 160 million shares at $0.01 each |
| Meta | 24 February 2026 | Up to 6 gigawatts | Warrant for up to 160 million shares at $0.01 each |
| Anthropic | 22 July 2026 | Up to 2 gigawatts | Equity investment of up to $5 billion in Anthropic |
| Microsoft | 20 July 2026 | Helios racks on Azure | No warrant disclosed |
Source: AMD investor relations and AMD SEC filing
In July 2026, AMD agreed to supply Anthropic with up to 2 gigawatts of chips and said it would invest up to $5 billion in Anthropic. Days earlier, Microsoft had agreed to run AMD’s Helios rack systems on Azure.
The two warrants together come to 320 million shares, against the 1.63 billion AMD has outstanding today.
We did a back-of-the-envelope calculation and found that a holding of 100 shares now would represent about 84 shares’ worth of the company once all of them are issued.
The research firm SemiAnalysis modelled what the warrants do to the customer’s bill. AMD’s share price rose from about $200 early in 2026 to roughly $490 in early August. That reportedly cut Meta’s cost of running the chips from about $2.15 to $1.60 per GPU-hour, and OpenAI’s from about $2.50 to $1.75.
Those savings move with AMD’s share price, so the higher the shares go, the less the two largest buyers pay for their chips.
What happened this week
The deal set a share price target of $600 for the last instalment of the warrant. AMD closed at $612.46 on Monday, so that target has now been met.
Hitting the target hands over nothing on its own. OpenAI still has to install the chips, gigawatt by gigawatt, and the filing says each instalment depends on other technical and commercial terms too.
The share price was the one condition the market helped settle. The rest depends on how fast the chips get built and switched on, and OpenAI’s warrant runs out on 5 October 2030.
The case on the other side
AMD’s data centre business, which sells its AI chips, doubled its revenue in the June quarter. Almost none of the chips promised to OpenAI and Meta had been delivered by then, so that growth came from other buyers.
Microsoft is one of them, and in July it agreed to run AMD’s AI systems inside its cloud service, Azure, with no warrant disclosed. Meta and Microsoft are also two of the most profitable companies in the world, while if you remember from the example we told you from the past… many of the telecoms firms Lucent lent to ran out of money and went bust.
AMD shares have gained about 290% over the past year.
Source: AMD on Vested
Neither AMD nor its customers have disclosed how many warrant shares have been exercised so far. The first gigawatt of chips for OpenAI and Meta is scheduled to ship in the second half of this year.
What this means for investors
Start by checking whether you own an S&P 500 fund, because AMD is, for example, about 1.16% of Vanguard S&P 500 ETF (VOO)’s latest published holdings. That makes it a question for index holders too.
A high multiple moves further in both directions. A company valued at 157 times earnings is being paid for profits that have not arrived. AMD’s beta of 2.48 means the shares have historically moved about two and a half times as much as the market.
Dilution is the slower risk, because if all 320 million warrant shares are issued, the same profits are divided among roughly 20% more shares.
Two dates are worth marking, starting with the Fed meeting on 27 and 28 October. AMD is expected to report its next results on 3 November, though the company has not confirmed that date.
We are watching the deployment milestones more closely than the share price from here.
You can look up both AMD and the Vanguard S&P 500 ETF (VOO) on Vested.
Nothing here is a recommendation to buy either. US stocks carry market risk, returns in rupees move with the rupee to dollar rate, and past performance is not indicative of future returns.
