AMD signed a large order for 2.5 GW of AI data centers, but its stock price still fell 7.1%
AMD announced on Monday that it had signed an AI data center cooperation agreement of up to 2.5 gigawatts with Core Scientific, but was dragged down by weakness in the entire chip sector. AMD's stock price fell about 7.1% in late trading on Tuesday. Under the agreement, AMD will acquire more than 500 megawatts of U.S. data center capacity from Core Scientific, with delivery expected to begin in 2027, and retain the right to expand to 2.5 gigawatts. The first batch of capacity involves 15-year leases at five facilities in Texas, Oklahoma, Alabama and Georgia, of which AMD directly leases 380 MW and the remaining 152 MW is used by an unnamed cloud service provider, for which AMD provides a credit guarantee. The deal is a key step in Core Scientific's full shift from Bitcoin mining to AI infrastructure, after its shareholders rejected CoreWeave's $9 billion acquisition offer. Core Scientific expects the initial contract to generate more than $14 billion in base revenue and total contract revenue in excess of $24 billion. AMD received warrants for up to 30 million Core Scientific shares, with an exercise price of $23.47 per share, vesting in installments based on capacity deployment progress. This decline reflects more of the overall "bleeding" effect of the AI hardware sector. Affected by multiple factors such as Michael Burry's short selling of the semiconductor sector, market doubts about the AI financing model, and rising risk aversion on the eve of the Federal Reserve meeting, the Philadelphia Semiconductor Index closed down 2.23% on Monday, and AMD closed down 5.17%. When there is an obvious inflow of funds in the software and application layers, investors question the sustainability of large-scale capital expenditures, and pure hardware concept stocks are under obvious pressure.