Sanmina Stock Surges 60% Following AMD and OpenAI Deal

What's Happening?

Sanmina Corporation's stock experienced a significant surge, rising by 59.29% in pre-market trading on Monday. This increase follows an announcement from Advanced Micro Devices (AMD) regarding a new deal with OpenAI, the creator of ChatGPT. AMD has agreed to supply up to 6 gigawatts of its graphics processing units (GPUs) to OpenAI, which is seeking to meet its growing demand for AI chips. As part of the deal, OpenAI has been issued warrants that could potentially grant it up to a 10% stake in AMD. Although Sanmina was not directly mentioned in the AMD-OpenAI deal, its stock rose due to its existing ties with AMD. Earlier this year, Sanmina agreed to purchase the data center infrastructure manufacturing business of ZT Systems from AMD for $2.55 billion, a deal expected to close by the end of 2025.

Why It's Important?

The surge in Sanmina's stock highlights the interconnected nature of the tech industry, where developments in one company can significantly impact others. Sanmina's relationship with AMD positions it as a key player in the manufacturing of data center infrastructure, particularly as AMD expands its AI capabilities through its partnership with OpenAI. This development underscores the growing importance of AI technology and the demand for advanced computing solutions. For investors, the rise in Sanmina's stock reflects confidence in its strategic partnerships and future growth potential. The deal between AMD and OpenAI also emphasizes the increasing investment in AI technologies, which could drive further innovation and competition in the tech sector.

What's Next?

As the deal between AMD and OpenAI progresses, Sanmina is likely to benefit from its strategic partnership with AMD. The completion of Sanmina's acquisition of ZT Systems' data center infrastructure business will further solidify its position in the market. Investors and industry analysts will be watching for any additional announcements or developments from AMD and OpenAI that could impact Sanmina's operations and stock performance. The broader tech industry will also be observing how this partnership influences the competitive landscape and the adoption of AI technologies.