OpenAI's $600M AMD Stake Sparks 10% Rally, Insider Trading Speculation
OpenAI has invested in AMD, acquiring a 10% stake and partnering for advanced AI chips. The deal has sparked a rally in AMD's stock price and raised speculation about insider activity.
On October 2, OpenAI purchased a 10% stake in AMD, demonstrating confidence in the company's AI strategy. This move was followed by a sharp rally in AMD's stock price. The timing of an options trade, worth over $6 million, has raised eyebrows. The investor bought out-of-the-money AMD call options just before the OpenAI announcement, which is considered 'super unusual'.
Analysts have praised the OpenAI deal, with Jefferies upgrading AMD's stock to 'Buy' and raising its target to $300. They view the partnership as crucial for AMD to catch up with Nvidia in the AI chip market. OpenAI will supply up to 6 gigawatts of GPU compute power for AI infrastructure. However, AMD's biggest challenge remains executing its six-gigawatt commitment and meeting production deadlines.
An investor turned a $6 million bet on AMD options into an estimated $18 million profit in just two days, following the OpenAI partnership announcement. The news sent previously speculative call options soaring over 300%. While the OpenAI deal is seen as transformative, AMD's success will depend on its ability to deliver on its commitments.
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