AMD stock rockets more than 35% on OpenAI deal

Core Insights - AMD's shares surged in pre-market trading following a multi-billion dollar deal with OpenAI to supply over 6 gigawatts of GPUs, starting with MI450 chips in late 2026 [1][2] - OpenAI will acquire up to 160 million shares of AMD, approximately 10% of the company, with shares vesting as AMD meets specific milestones [2] - The partnership is projected to generate tens of billions in revenue for AMD and enhance OpenAI's AI infrastructure [2][3] Company Developments - The agreement is expected to significantly enhance shareholder value and be highly accretive to AMD's non-GAAP earnings-per-share [3] - This deal follows Nvidia's announcement of a $100 billion investment in OpenAI for data center development [3] Market Context - OpenAI is currently valued at $500 billion, making it the most valuable startup globally [4] - Recently, OpenAI signed a $300 billion agreement with Oracle for cloud equipment [5] - AMD's stock has underperformed Nvidia's over the past year, with a 1% increase compared to Nvidia's 52% rise, although AMD shares have climbed 75% in the last six months [5][6] Industry Trends - The surge in AI project spending has raised concerns about a potential AI bubble, as noted by industry leaders like Jeff Bezos [6]