Nasdaq, OpenAI Effect Leads Upward AI-Related Companies, including AMD

Nasdaq, OpenAI Effect Leads Upward AI-Related Companies, including AMD

The U.S. stock market surged with AMD (+23.71%) announcing a partnership with OpenAI, while related stocks rose amid expectations for the AI industry thanks to OpenAI’s developer conference. Meanwhile, the Dow is falling due to sluggish consumption-related stocks due to the strong dollar and rising interest rates on government bonds due to Japanese and French political issues. In particular, as Powell mentioned, K-shaped growth and K-shaped consumption have expanded anxiety among the middle class, which is also characterized by sluggishness in some consumption-related stocks. In general, the market closed mixed (-0.14% Dow, +0.71% Nasdaq, +0.36% S&P 500, +0.41% Russell 2000 and Philadelphia Semiconductor Index +2.89%) due to strong anxiety over the economy

• Variants: AI Industry and OpenAI, Japanese and French Politics

AMD (+23.71%) surged after announcing a partnership with OpenAI. Market players interpret the news as the spread of the AI industry, with most of the related stocks rising. In the meantime, OpenAI announced a key strategy to accelerate the quantitative and qualitative deepening of the AI industry at the same time through its annual developer conference. First, it is expected to promote the quantitative growth of the AI ecosystem by eliminating the economic barriers of development costs by lowering API prices and introducing automatic prompt caching. For the qualitative deepening, the multimodal refinement API support allowed enterprise customers to customize GPT-4o, and the presentation of autonomous AI agent vision through the o1 model foreshadows that AI will form a new software paradigm.

Sam Altman released growth figures showing ChatGPT has over 800 million weekly active users and is processing 800 billion tokens per minute with 4 million developers participating. In addition, he accelerated ecosystem expansion by announcing four key tools: App SDK, AgentKit, ChatKit, and Codex, and demonstrated his ability to reprogram real-time apps with just voice commands. While Salesforce (+2.25%) rose due to the Slack mentioned at the event, the market’s expectations and attention were concentrated, with the stock prices of HubSpot (+2.59%), Kocera (+0.39%), and Figma (+7.39%) soaring immediately after the announcement.

Meanwhile, Morgan Stanley announced that Microsoft is leading the expansion of the AI industry by evolving into an AI development and distribution platform company that acts as an AI operating system beyond just providing AI capabilities. Microsoft is expanding its Copilot-centric strategy to building a developer ecosystem, vertically integrating Azure (infrastructure), GitHub (developer platform), VS Code (development tool), and Copilot (interface) into Copilot runtime. This structure unifies AI calls and enables non-developers to create AI apps, and announced that it has completed a virtuous cycle in which AI creates software and the software advances AI. Ultimately, MS is expected to strengthen its operating system position in the AI era, solidifying its long-term market dominance. These results are expected to help the spread of the AI industry in the long term, driving the strength of AI-related stocks.

Amid this, the strong dollar and rising interest rates on government bonds are underway. This is presumably due to political issues in Japan and France. Former economic and security minister Takaichi Sanae was elected as the new prime minister at the end of October by the Liberal Democratic Party of Japan. Takaiichi insists on economic growth through fiscal expansion. This means that the government will focus on economic growth rather than fiscal soundness, and the possibility of a surge in bond issuance is expanded. In addition, he is critical of the BOJ’s interest rate hike. As a result, the Japanese stock market soared 4.75 percent the previous day, the yen weakened by more than 1.7 percent against the dollar, and interest rates on government bonds soared. Amid this development, he resigned as prime minister less than a month after the appointment of a new French prime minister. He resigned one day after the announcement of the Cabinet, but uncertainties surrounding the composition of the government and the budget plan have increased due to the division between the president and the parliament. Fiscal concerns in France have been highlighted, with the weakening euro, rising interest rates on French government bonds, and falling 1.36 percent in the French stock market. The U.S. dollar strengthened and the interest rates on government bonds have been rising due to Japan and the Fran win issue. In the stock market, most of the stocks related to the economy have declined except for some technology stocks.

• Featured stocks: AMD, Tesla, MS rise Vs. Nvidia, Apple fall

Semiconductors: AMD Surges On Partnership With OpenAI
AMD (+23.71%) surged after it was reported that it would provide a 10% stake in warrants in a strategic partnership with OpenAI to build 6 gigawatt AMD GPUs. In particular, with this contract, AMD announced that it expects more than $100 billion in new sales over four years. On the related news, Sanmina (+22.72%), which acquired ZT System’s data center infrastructure manufacturing business in May, also surged. On the other hand, Nvidia (-1.11%) fell due to intensifying competition in that OpenAI’s new computing uses AMD chips. Given that Broadcom (-0.85%) also signed a $10 billion AI chip order agreement with OpenAI last month, it fell with Nvidia due to anxiety over new contracts

Semiconductor: Micron Strong On Upside On Investment Opinion
Micron (+1.67%) rose as Morgan Stanley raised its target price to $220 from neutral to overweight, saying it will grow double digits over the next several quarters. In particular, the structural strength of DRAM prices and easing of HBM-related concerns are also positive factors. While semiconductor components and equipment companies such as AMAT (+2.93 percent), RAM Research (+2.29 percent), TSMC (+3.49 percent) rose due to AMD effects and OpenAI’s developer conference, AI server companies such as Arista Network (+2.75%) and Super Microcomputer (+5.12 percent) also rose. The Philadelphia Semiconductor Index rose 2.89 percent

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