Dot-com fears rise with tech stocks seeing $100 billion swings

Core Viewpoint - The excitement surrounding OpenAI's expansion is driving significant gains in technology stocks, but there are concerns among Wall Street professionals that rapid increases in market value may indicate an unhealthy market reminiscent of the dot-com era [1][4]. Group 1: Market Reactions - Advanced Micro Devices Inc. (AMD) experienced a substantial stock surge, briefly increasing its market capitalization by approximately $100 billion after signing a deal with OpenAI, which could lead to billions in revenue [2]. - Oracle Corp. shares rose by 36% last month, adding $255 billion to its market value in a single session, following strong guidance for its cloud business, including a $300 billion agreement with OpenAI over five years [2]. - The rapid appreciation of large technology stocks raises concerns about potential disconnection between valuations and underlying fundamentals, with investors possibly driven by fear of missing out [7]. Group 2: Concerns About Market Dynamics - There is a growing fear of a bubble forming around artificial intelligence, with significant investments being made by key players like Nvidia and OpenAI, reminiscent of the telecom bubble in the mid-1990s [3][5]. - The current market environment is described as potentially more explosive than in 1999, with top tech stocks now accounting for about 35% of the S&P 500 Index, compared to less than 15% in 1999 [4]. - Concerns have been raised about the circular capital structures of companies involved in these deals, where they use each other's funds to purchase products, which could lead to instability [5]. Group 3: Analyst Perspectives - Analysts view AMD's deal with OpenAI as a significant advancement in its competitive position in the graphics processing unit (GPU) market, with one analyst raising the price target for AMD from $210 to $270 [6][7]. - The scale of stock market movements for large companies is seen as unusual and warrants reflection, as such rapid increases in market value are not considered normal [6][9]. - The current market dynamics are characterized by exuberance, with significant price movements that may not align with fundamental valuations [8][9].