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AMD records $1B quarterly charge tied to warrants issued to OpenAI, Meta
AMD recorded a third-quarter charge of more than $1B tied to performance-based stock warrants issued to OpenAI and Meta under chip supply deals. Its CFO said GAAP earnings per share included a $1.1B noncash adjustment, and the warrants could let the customers buy up to 10% of AMD if milestones are met.
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What happened
AMD recorded a third-quarter charge of more than $1B tied to performance-based stock warrants issued to OpenAI and Meta under chip supply deals. Its CFO said GAAP earnings per share included a $1.1B noncash adjustment, and the warrants could let the customers buy up to 10% of AMD if milestones are met.
Confirmed
Global impact / market context
The charge lowers AMD’s reported GAAP earnings, though its CFO said it does not affect free cash flow or non-GAAP results. If the customers exercise vested warrants, AMD would issue shares, increasing its share count and reducing existing shareholders’ ownership percentages.
Analyst inference
The deals connect AMD’s chip revenue to potential share issuance: supplying chips brings accounting adjustments as AMD’s share price and estimated chance of meeting warrant conditions change. If milestones are met and warrants are exercised, new shares could dilute existing owners, while the adjustment itself does not use cash.
Analyst inference
What to watch
- AMD said quarterly noncash fair-value adjustments, which are changes in the estimated value of warrants, are expected to increase as the chip supply deals progress. Confirmed
- Watch for whether OpenAI or Meta meet the warrant milestones and exercise their rights to buy shares; that would increase AMD’s share count and dilute existing owners. Analyst inference
- AMD’s CFO reported GAAP earnings per share of $1.46, including a $1.1B noncash charge; future results will show how warrant adjustments develop alongside chip shipments. Confirmed