Vultr, a cloud infrastructure company, announced that it will invest over $1 billion to build a new artificial intelligence cluster at a data center in Springfield, Ohio, according to Reuters. The cluster will run on 24,000 AMD (AMD) Instinct MI355X graphics processing units (GPUs) and use 50 megawatts of power. The company expects the new cluster to be ready by early 2026 and already has similar GPUs available in its Chicago region for testing and pilot programs.
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Unsurprisingly, Vultr is trying to take advantage of the growing demand for AI by offering a cheaper alternative to major cloud providers. According to CEO J.J. Kardwell, Vultr’s services usually cost about half as much as those from the bigger players. While there are no confirmed customers yet for the Ohio facility, the company is in talks with several businesses and expects to sell out the cluster before it even goes live.
It is worth noting that Vultr has been offering central processing units (CPUs) since 2014 and began including GPUs in its services in 2021. Since then, AI infrastructure has become the company’s largest source of revenue. In addition, the company reached a $3.5 billion valuation in December 2024 after a funding round led by LuminArx Capital Management and AMD Ventures. To finance the new cluster, Vultr is extending its credit line with several large banks, including Bank of America (BAC), JPMorgan (JPM), Goldman Sachs (GS), and Wells Fargo (WFC).
Is AMD a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AMD stock based on 28 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMD price target of $284.67 per share implies 32% upside potential.
