AMD Shares Surge 24% After Signing OpenAI Deal
On Monday, the S&P 500 and the Nasdaq achieved their 32nd and 31st record closes of year, respectively. The S&P 500 gained 0.36% whilst the Nasdaq rose 0.71%. However, the Dow Jones declined 0.14%, with Verizon weighing on the index after the telecommunications giant replaced its CEO.
Let’s take a look at what else has been going on in the markets and what to look out for this week.
AMD Shares Surge on OpenAI Deal
Leading Monday’s gains was chipmaker Advanced Micro Devices (AMD), whose share price surged 24% during the session.
The move came after AMD and OpenAI announced a multibillion-dollar deal, which could also see the ChatGPT maker take a stake of up to 10% in AMD.
OpenAI announced it would deploy 6 gigawatts of AMD’s Graphic Processing Units (GPUs) over multiple years and multiple generations of AMD Instinct GPUs. The first gigawatt deployment is set to begin in the second half of 2026.
As part of the deal, AMD has issued a warrant that allows OpenAI to incrementally acquire up to 160 million shares of AMD over the course of the deal as certain milestones are met. OpenAI can exercise the first portion of its warrant once the initial gigawatt is deployed.
If OpenAI were to exercise the full warrant for 160 million shares, it could acquire a stake of roughly 10% in the chipmaker, based on the current number of shares outstanding.
The news follows OpenAI and Nvidia’s announcement two weeks ago, in which Nvidia stated it would invest up to $100 billion in OpenAI. Nvidia’s shares dropped 1.1% during Monday’s session.
Gold Hits Another High
Gold prices soared above $3,900 an ounce on Monday, as the precious metal hit another record high during the session.
As well as expectations of a Federal Reserve interest rate cut later this month, prices are being driven higher by increased safe haven demand due to political uncertainty in the US, France and Japan.
In the US, the federal government shutdown continues into its seventh day, with little sign of resolution. On Monday, two proposals to fund the government - one presented by the Democrats, the other by the Republicans - both failed in the Senate.
Across the Atlantic, an ongoing political crisis in France took an unexpected turn, as Prime Minister Sebastian Lecornu abruptly resigned. His resignation came just 26 days after his appointment and about 14 hours after he named his cabinet. It makes him the third prime minister to leave office since December 2024.
Meanwhile, in Japan, Sanae Takaichi was elected as leader of the ruling Liberal Democratic Party, placing her on the verge of becoming the country’s first female prime minister.
Japanese stocks surged on the news, with the Nikkei 225 index jumping 4.8% on Monday and hitting a record high. However, Japanese government bond yields also rose (yields move inversely to price) and the yen plunged 2% against the US dollar due to concerns about fiscal policy.
What to Look Out for This Week
Earnings season is upon us once again, as some companies start reporting third quarter results. Here are a few events to watch out for this week:
- Wednesday
- FOMC Minutes
- Thursday
- Delta Air Lines Q3 Results
- PepsiCo Q3 Results
- Friday
- University of Michigan Consumer Sentiment Index
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