AMD stock continues rally after OpenAI deal, now up 43% this week so far

AMD's stock surged by 11% on Wednesday, continuing a remarkable upward trajectory that began earlier this week. This rally was sparked by OpenAI's announcement of plans to purchase billions of dollars in AI equipment from the semiconductor company. On Monday, the developer of ChatGPT revealed intentions to acquire a potential 10% stake in AMD, contingent on stock performance and partnership milestones. As a result of this surge, AMD's market capitalization has now reached $380 billion, following a 4% increase on Tuesday and a substantial 24% rise on Monday. With shares climbing 43% so far this week, the company is on track for its strongest weekly performance since April 2016. The collaboration with OpenAI, which has historically partnered with Nvidia, has significantly boosted investor confidence in AMD's ability to compete in the AI chip market. AMD's CEO, Lisa Su, described the agreement as a "win-win," emphasizing that their AI chips are robust enough for large-scale applications, such as those utilized by OpenAI and major cloud service providers. In response to the partnership, Nvidia's CEO, Jensen Huang, shared his thoughts on CNBC's Squawk Box, expressing surprise at the deal. He remarked, "It's imaginative, it's unique and surprising, considering they were so excited about their next-generation product. I'm surprised that they would give away 10% of the company before they even built it. And so anyhow, it's clever, I guess."