NEW YORK — AMD has issued warrants over 320 million of its own shares to two customers, at an exercise price of one cent each. The company had 1.63 billion shares outstanding at the start of the quarter, so the paper it has written against itself amounts to just under a fifth of the business.
One of those warrants went to OpenAI in October 2025. The second went to Meta in February 2026. Both are structured identically, both cover up to 160 million shares, and both vest only as the customer buys AMD accelerators.
The published version of this story is usually the OpenAI half. The Meta half doubles it, and it is in the same paragraph of the same filing.
AMD fell 3.38 per cent to $457.25 in the early afternoon in New York, one of the worst performers in a semiconductor complex that was down across the board. Nothing in the company’s reported numbers explains that. The quarter was the best in its history.
AMD Stock Today: Down With the Sector, Not With the Numbers
| Instrument | Price | Session | Below 52-week high |
|---|---|---|---|
| Advanced Micro Devices (AMD) | $457.25 | -3.38% | -21.8% |
| Intel (INTC) | $87.02 | -3.39% | -38.9% |
| Nvidia (NVDA) | $209.59 | -2.39% | -11.4% |
| Broadcom (AVGO) | $360.79 | -2.08% | -27.1% |
| PHLX Semiconductor Index (SOX) | 11,407.97 | -2.83% | -22.2% |
| Nasdaq 100 | 29,045.27 | -0.90% | -5.6% |
| Dow Jones Industrial Average | 53,328.01 | +0.10% | -2.6% |
| Live intraday quotes, not settlements; these will move before the close. Distance from the 52-week high is Eastern Herald’s calculation from the quoted price. AMD’s 52-week low is $149.22, so the shares remain roughly three times that level even after Monday. | |||
The Quarter AMD Actually Reported
The segment numbers, taken from the quarterly report AMD filed with the Securities and Exchange Commission, show one business carrying the company.
| Segment | Q2 2026 ($m) | Q2 2025 ($m) | Change |
|---|---|---|---|
| Data Center | 6,718 | 3,240 | +107% |
| Client | 3,062 | 2,499 | +23% |
| Gaming | 779 | 1,122 | -31% |
| Embedded | 977 | 824 | +19% |
| Total net revenue | 11,536 | 7,685 | +50% |
| Figures as reported. Percentage changes are Eastern Herald’s calculation. Gross profit was $6,203 million, or 53.8 per cent of revenue, and diluted earnings were $1.38 a share against $0.54 a year earlier. Gaming was the only segment to shrink. | |||
Data centre revenue more than doubled and now accounts for 58 per cent of the company. Gaming fell 31 per cent. AMD is being remade into an accelerator business in real time, and the transition is running well ahead of the market’s willingness to pay for it.
Set that against the company it is chasing. Nvidia’s data centre revenue in its most recent quarter was $75.2 billion, more than eleven times AMD’s, at a materially higher gross margin. AMD is growing quickly into a market where the incumbent is an order of magnitude larger and considerably more profitable per unit sold.
The Warrants, and What They Actually Say
AMD entered multi-year agreements with OpenAI in October 2025 and with Meta in February 2026. Under each, the customer intends to deploy up to six gigawatts of AMD data centre GPUs, with the first gigawatt of each powered by the Instinct MI450 series. Twelve gigawatts of intent, across two counterparties.
In connection with those agreements AMD issued each customer a warrant to purchase up to 160 million shares at an exercise price of $0.01. That is not an option struck at the market price. At a penny a share, exercise is close to free, and the value transferred is essentially the whole share price.
The vesting terms are disclosed, and they are the reason this is a defensible structure rather than a giveaway. Tranches vest against specified AMD Instinct GPU purchase milestones, met by the customer, its affiliates, or indirectly through authorised third parties, and against specified stock price targets. The OpenAI warrant carries additional stock performance thresholds. Each vested tranche is subject to further conditions.
And as of June 27, no tranche of either warrant had vested or become exercisable. The warrants had no impact on the quarter’s results.
So the dilution is real but contingent, and it is contingent on exactly the thing shareholders want: customers buying a great many accelerators, and the share price rising. AMD has arranged for its two largest AI customers to be paid in AMD stock for making AMD succeed. Whether that is elegant or expensive depends entirely on the price per accelerator, which is not disclosed.
One detail sharpens the picture. In the same quarter AMD repurchased 1.1 million of its own shares for $221 million, with $9.2 billion still authorised. It is buying back stock by the million while writing warrants by the hundred million.
AMD Is Also Guaranteeing Its Customers’ Leases
The least-discussed disclosure in the filing is not about equity at all. As of June 27, AMD carried a maximum gross exposure of $4.1 billion from guarantees issued in connection with certain commercial partner data centre lease obligations, with terms running up to 15 years.
Those guarantees become payable if a commercial partner defaults. AMD notes that they may be issued in exchange for warrants, which means the two mechanisms are related instruments in the same commercial negotiation.
Put the three together and AMD is supporting demand for its chips from three directions at once: warrants over a fifth of its equity, guarantees on its partners’ fifteen-year property leases, and the chips themselves. It is the same question Eastern Herald raised about Nvidia financing the buildout it also supplies, and about Microsoft booking gains on a stake in its own cloud customer, arriving in a harder form. When the seller of the equipment underwrites the buyer’s balance sheet, revenue and capital begin to look like one transaction seen from two ends.
Why the Whole Complex Fell Together
Monday’s move was not about AMD. Every large chip name dropped, memory hardest of all, with SanDisk down about 7 per cent and Micron close to 6. Intel slipped below the $95 at which it sold $20 billion of new stock twelve days ago.
The cause is the calendar rather than any company. Nvidia reports on Wednesday after the close, the Jackson Hole symposium opens on Thursday and July inflation data arrives on Friday. Crowded positions get reduced before events like that, and AI semiconductors are the most crowded position in the market.
The distribution of the damage says the same thing. As our Nasdaq column for Monday sets out, roughly half of the largest Nasdaq companies were higher on the day. The index fell because chips fell.
What This Column Cannot Tell You Yet
We cannot tell you the economics of either agreement. AMD discloses the scale in gigawatts, the warrant size, the exercise price and the vesting triggers, but not the price per accelerator and not the gross margin on the deployments. Without those, nobody outside the parties can say whether twelve gigawatts is highly profitable business bought with a fifth of the equity, or thin business bought with a fifth of the equity.
We also do not know how much of the first gigawatt has shipped. The second half of 2026 is a six-month window and we are two months into it. AMD has published no deployment update, and since no warrant tranche has vested, the filing offers no indirect read on purchase milestones either. The most important operational fact in the AMD story this year is still described only in the future tense.
