AMD's 24% Surge Unleashes Millions of Dollars in Bullish Option Trades: Options Chatter

Luzi Ann Santos joined discussion · Oct 6 10:32

$Advanced Micro Devices (AMD.US)$’s 24% surge Monday unleashed millions of dollars in call option trades that could pay off should the semiconductor giant sustain its rally.

Shares jumped after the company disclosed a deal with OpenAI that AMD said could “deliver tens of billions of dollars in revenue,” while accelerating the artificial intelligence infrastructure buildout for the startup behind ChatGPT. The stock closed at $203.71 after climbing to as high as $226.71.

(To see AMD's options chain, click here. For the unusual options activities, click here.)

AMD's 24% Surge Unleashes Millions of Dollars in Bullish Option Trades: Options Chatter

“This agreement creates significant strategic alignment and shareholder value for both AMD and OpenAI and is expected to be highly accretive to AMD's non-GAAP earnings-per-share,” AMD Chief Financial Officer Jean Hu said in the company’s press release Monday.

Under the agreement, OpenAI will deploy 6 gigawatts of AMD’s graphics processing units (GPUs), according to a filing with the Securities and Exchange Commission.

AMD issued a warrant to OpenAI for the ChatGPT parent to buy as much as 160 million shares of the semiconductor company, the filing showed. The warrant shares will vest in tranches, based on milestones tied to purchases of AMD GPU products. The first tranche will vest after the delivery of the initial 1 gigawatt of AMD Instinct MI450 Series GPU products. The delivery is expected to start in the second half of 2026.

Among the block trades posted so far was the $2.27 million purchase of call options that give their holder the right to buy 472,000 AMD shares at $240 each in four days. While that trade wasn't the biggest, the size of the call options purchased was more than 22X the open interest. Three other unusual trades were posted covering those call options.

“Though the near-term impact appears limited, the deal could transform AMD's AI positioning by driving rack-scale adoption and expanding hyperscaler interest beyond Nvidia,” Bloomberg Intelligence analysts Kunjan Sobhani and Oscar Hernandez Tejada wrote in a note Monday.

Share your thoughts on AMD and the rest of the semiconductor stocks in the comments section. Do you think this deal with OpenAI is enough to assuage any linger investor concerns about the sustainability of companies' AI spending? Let your voice be heard by voting below. And if you want to read more options columns like this one on Nvidia, or this one on Pfizer, follow me here.

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