AMD Share Warrants Impact Profitability of AI Deals, Says Morgan Stanley

Advanced Micro Devices (NASDAQ: AMD) has successfully secured major AI customers, including OpenAI and Meta, leveraging its Instinct GPUs. While these deals contributed to a 50% year-over-year increase in second-quarter revenue to $11.5 billion, with data center revenue more than doubling to $6.7 billion, Morgan Stanley has highlighted potential profitability concerns related to the warrants issued as part of these agreements.

Morgan Stanley analyst Joseph Moore estimates that $AMD+WL is effectively issuing warrants worth over $15 billion for every $15 billion to $20 billion in revenue generated from OpenAI and Meta. If treated as a cash expense, these warrants could significantly diminish the profitability of $AMD+WL's GPU business. The warrants, covering up to 320 million potential shares—equivalent to nearly 20% of $AMD+WL's outstanding shares—were described as a "material inducement" for the supply agreements. However, none of these warrant shares had vested as of June 27, with vesting contingent on substantial GPU purchase milestones and share-price thresholds, including up to $600 for the OpenAI warrant.

As of the end of Q2 2026, 165 hedge funds held long positions in $AMD+WL, marking a 23% increase from the previous quarter. Marshall Wace, for example, held approximately 3.90 million shares, a 3% increase. Short interest in $AMD+WL stood at 37.75 million shares on July 31, representing about 2.3% of the float, with 1.3 days to cover.

### Story Arc / How We Got Here Today's analyst report on $AMD+WL's warrant issuance provides a deeper financial context to the ongoing strategic capital allocations within the AI infrastructure sector. This follows earlier reports from August 17, 2026, where Nvidia (NASDAQ: NVDA) was in discussions to invest up to $3 billion in SB Energy for an OpenAI data center, signaling significant investments in AI infrastructure. Investors can review prior coverage of Nvidia's strategic move at /explore/nvidia-in-talks-for-3b-sb-energy-investment.

### Tape / Session Read In after-hours trading, Nvidia (NASDAQ: NVDA) declined by 2.86% to $217.55, while Microsoft (NASDAQ: MSFT) saw a gain of 1.21% to $506.06. Alphabet (NASDAQ: GOOGL) also rose by 1.22% to $344.82.

### Why This Lane Matters The implications of $AMD+WL's warrant strategy for its AI partnerships highlight the complex financial engineering involved in securing market share in the rapidly expanding artificial intelligence sector. This affects investor perceptions of profitability versus market adoption for companies like $AMD+WL and other major AI hardware providers. The market is assessing whether the dilution potential offsets the growth from key customer wins.

## $NVDA+WL Technical Analysis & Key Risk Watch — After-Hours Trading Implications Nvidia (NASDAQ: NVDA) closed the regular session at $217.55, reflecting a 2.86% decline for the day. The stock's RSI14 stands at 57.5, with volume at 0.91x its 20-day average. Key levels for NVDA (educational): R2 $222.22 · R1 $217.86 · last $217.55 · S1 $217.00 · S2 $214.80. The downward move in after-hours trading places the stock near its S1 support level, with potential for further consolidation or a bounce.

Microsoft (NASDAQ: MSFT) ended the regular session at $506.06, up 1.21%. Its RSI14 is at 84.5, indicating potential overbought conditions, with volume at 0.78x its 20-day average. Key levels for MSFT (educational): R2 $531.36 · R1 $513.73 · last $506.06 · S1 $502.27 · S2 $479.17.

Alphabet (NASDAQ: GOOGL) finished the session at $344.82, a 1.22% increase. The stock's RSI14 is 25.6, suggesting it might be oversold, with volume at 0.76x its 20-day average. Key levels for GOOGL (educational): R2 $346.48 · R1 $344.87 · last $344.82 · S1 $344.50 · S2 $341.93.