AMD Rockets Higher After OpenAI Deal Sends Nasdaq to Record Highs

AI Frenzy Pushes Markets Higher

Sometimes all it takes is one headline to light a fire under Wall Street and Monday’s came courtesy of Advanced Micro Devices (AMD | +23.71%) .

The chipmaker announced a multi-year, multi-billion-dollar agreement to supply OpenAI with hundreds of thousands of AI chips starting in 2026. The deal not only diversifies OpenAI’s supplier base beyond Nvidia, but it also reinforces AMD’s growing reputation as a serious challenger in the red-hot AI-chip race.

Optimistic analysts are already tossing around estimates of “billions in additional revenue” for AMD and investors didn’t need much convincing. The Nasdaq promptly raced to a new record, with AI enthusiasm once again overriding concerns about valuation bubbles or overheated expectations.

When the market smells AI profits, rational caution tends to take a back seat.

Tesla Teases New Model Y Version

Tesla (TSLA | +5.45%) was another bright spot. A series of cryptic posts from Elon Musk on X (because of course) fueled speculation that the EV giant is about to unveil a new, more affordable version of the Model Y. Investors have been begging for this move, as it could open up a much larger slice of the EV market.

Combine that with last week’s record quarterly revenue, and it’s easy to see why traders were eager to jump back on board the Tesla train.

Palantir Rebounds After Rough Week

After getting hammered on Friday over alleged “security flaws” in a U.S. Army communications platform, Palantir (PLTR | +3.73%) clawed back some of its losses.

The company and its defense partner Anduril insisted that the internal memo cited by Reuters was outdated and that most issues have since been resolved.

Wall Street seems inclined to give Palantir the benefit of the doubt.

Bank Merger Buzz and Corporate Shake-Ups

In the banking world, Fifth Third Bancorp (FITB | -1.4%) announced plans to acquire Comerica (CMA | +13.68%) in a $10.9 billion all-stock deal, offering a 20% premium. The regional banking sector could use some consolidation after the rough patch earlier this year, and investors appear to approve.

Elsewhere, Verizon (VZ | –5.11%) made headlines by appointing Daniel Schulman - yes, the former PayPal CEO - as its new chief executive. Schulman replaces Hans Vestberg, who led Verizon since 2018. Investors were apparently less than enthusiastic about the transition, sending the stock sharply lower.

Oil Climbs, Dollar Strengthens Amid Political Stalemate

The macro backdrop remains noisy.

• The U.S. government shutdown entered its second week as Congress continues to bicker over the debt ceiling. Economic data releases - including the trade balance and wholesale inventories - are now on hold, leaving traders to rely on Fed commentary for direction.

• Speaking of which, several Fed officials, including Chair Jerome Powell, are set to speak later this week. Markets are still leaning toward further rate cuts before year-end, especially with growth data now on pause.

• Meanwhile, oil prices ticked higher after OPEC+ announced it would raise production more modestly than expected. WTI crude settled around $61.69 a barrel, and Brent closed at $65.47.

• The euro (–0.3%) slipped to 1.1715 USD, while the Japanese yen (–1.9%) weakened sharply after conservative politician Sanae Takaichi was elected leader of Japan’s ruling party, potentially the country’s first female prime minister.

Crypto and Commodities Stay Firm

Crypto joined the rally as Bitcoin reached a new all-time high over the weekend, lifting Coinbase Global (COIN | +1.59%) and Strategy (MSTR | +2.29%). Gold and silver prices also nudged higher alongside a mild uptick in Treasury yields, a reminder that investors remain both optimistic and hedged.

Because if there’s one thing markets love, it’s believing in AI while simultaneously buying insurance against their own optimism.

Bottom Line

Monday’s session was a clear statement: Wall Street still believes in the AI story, shutdown or not. AMD stole the show, Tesla teased just enough to keep investors intrigued, and Palantir reminded everyone that even bruised tech names can bounce back fast.

As the week unfolds, all eyes will be on Fed commentary and whether the political stalemate in Washington starts to test investor patience. For now, though, the AI party is very much still on and AMD’s the one pouring the champagne.

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Kristoff - ChartMill

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