Shares of AMD jumped as much as 7.5% on October 7 after the chipmaker signed a deal with OpenAI that could generate significant revenue.

Market experts warn these rapid gains in major tech stocks, which add tens of billions of dollars in value within minutes, are signaling an unhealthy market reminiscent of the dot-com bubble.

Analysts point to circular capital flows between firms such as Nvidia, OpenAI, and Oracle, where investments and purchases are tightly intertwined.

The tech sector now makes up around 35% of the S&P 500 Index, up from less than 15% in 1999, increasing the impact of any downturn.

Some investors say the speed and scale of these rallies suggest valuations may be detaching from company fundamentals.

AMD’s market value briefly rose by about US$100 billion during intraday trading following the announcement.

This follows a 36% surge in Oracle shares in September, which added US$255 billion to its market cap after strong cloud business guidance and a US$300 billion agreement with OpenAI over five years.

🔗 Source: The Straits Times

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