Advanced Micro Devices Inc.’s (NASDAQ:AMD) multi-year deal with OpenAI could unlock $135 billion in revenue and mount a serious challenge to Nvidia Corp.’s (NASDAQ:NVDA) long-standing dominance, according to Goldman Sachs.

In a note shared Tuesday, the bank’s analyst James Schneider called the announcement "a strong positive" for the AMD’s long-term GPU business and significantly raised its earnings estimates and price target.

Goldman hiked its 12-month price target on AMD stock to $210, up from $150. The firm kept a “Neutral” rating due to funding risks and heavy customer concentration.

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How Big Is OpenAI’s Opportunity For AMD?

The AMD-OpenAI deal involves deploying a staggering 6 gigawatts (GW) of AMD GPUs—graphics processing units—to power OpenAI's expanding data center infrastructure over the next several years.

In return, OpenAI could receive up to 160 million AMD shares—valued at around $75 billion, or roughly 10% of the company—through performance-based warrants that vest in stages as GPU deployments ...