Hello and welcome to Market Domination. I'm Josh Lipton live from our NYC headquarters. Stocks mixed this Monday. NASDAQ getting a lift on news of AMD scoring one of the biggest AI wins yet. Going to be digging into that story and more. Right now, there is just an hour to go into the closing bells. Let's take a look at the major averages here. The Dow is down about 70 points. The S&P 500, your broad gauge is up about 4/10 of a percent. Tech Nasdaq is up nearly 9/10 of a percent. Let's welcome in here tech editor Dan Howley, data and markets editor Jared Blickery going to help us break down all the headlines. Jared, my friend, I'm going to send it to you over to you first for a look at the day trading action so far.
Thank you, Josh. As you said, a mixed market and that's only because we have the Dow very slightly in the red. Quick intraday price action started out in the green and we've just kind of been hovering around the flatline there over the last few hours. But the NASDAQ fueled by that AMD deal and also the chip trade that has been screaming higher just a little bit off of its highs here up about 85 basis points or 8/10 of 1%. S&P 500 a pretty similar story to the NASDAQ but only up about half as much. And we'll also throw in the Russell 2000 to take a look at the small caps. You can see off of its highs there still up about 6/10 of a percent. And in the bond market, we are seeing yields broadly higher. The 10-year Treasury note yield up four basis points to 4.16%, 30-year to 4.76%. That's also a four basis point move. And the US dollar index following in sympathy there. So, taking a look at the sector action, not surprisingly, it is a market dominated by tech. XLK up 1.4% followed by consumer discretionary, that's a Tesla story. We're going to get to that in a second. Then utilities, part of that AI trade. And throw in energy there. That's up a half a percent. All of those outperforming the S&P 500. To the downside, we got real estate, staples, healthcare. Those are leading to the downside. And that is a defensive setup. So pretty bullish as you take a look especially at the NASDAQ 100. Dow's a little bit different, but guess the standout here is AMD. That's today. This is year-to-date up 70% rocketing through those old highs. So big gain there. Microsoft though in software that's up over 2%. Nvidia because of the AMD thing. That's probably a big reason why it's just slightly declining there. And Apple and Broadcom, we'll just throw those in there. Nothing big to talk about as we take a look at some of those individual issues. Now in the Dow it looks a little bit more negative. We're seeing some of the industrials fall off like Caterpillar down a third of a percent, Home Depot and discretionary that's down 1.5% then healthcare names but overall not a terribly bearish picture. And looking at my leaders and my sentiment indicators, guess what? SOX, that's the chip index that is up 3.7%. That is leading the way. But disruption also doing well. That's the ARK Innovation Fund, ARK. Bitcoin at a record high. By the way, so is gold. We got digital and physical gold at record highs. IPO, cannabis, transportation, software, Mag 7, you name it. We've got a broad smattering of strength in that top row. What's not working today? Home builders, retail traders or retailers. That's XRT, gambling, low volatility, and biotech. So, put it all together, we're looking at a broadly bullish day here, Josh.
All right, thank you, Jared. Appreciate it. Well, AMD shares surge and chipmaker announcing a multi-billion dollar deal with OpenAI, signaling a new alignment between the two AI powerhouses. For more, we're bringing in Yahoo Finance tech editor Dan Howley. Dan?
Yeah, Josh, this is a big deal obviously for both companies, but primarily for AMD, which you know, this kind of sets it up now in a better position to take on Nvidia as far as the AI market and AI chip market. And so, you know, this multi-billion dollar multi-year deal will basically see them supply chips starting with their MI450 line of GPUs for data centers for OpenAI. And they're obviously very keen on getting as many chips as they can as they continue to build out their data center capabilities and meet consumer demand and enterprise demand as they continue to build that out. So, this is going to be a big deal for AMD. On the flip side for Nvidia, not necessarily a negative. Sure, they would have loved to be able to been the supplier on this end of things, but they've already been supplying chips to OpenAI for quite some time, not to mention, you know, the Microsofts, Google's, Amazons of the world. And so it's not as much of a downer. Importantly, as part of this deal, OpenAI gets about a 10% stake in AMD if they start to meet if AMD hits certain milestones. It includes a first tranche of shares that would be tied to them delivering those MI450 chips. So, this would really set them up in the future. The whole thing works out to about 6 GW of power for GPUs. But that's up to it doesn't necessarily mean they're going to hit that 6 gigawatt. It's just there's the opportunity to reach that, as far as providing those chips. So, yeah, we just have to see over time how this kind of continues to build out. Like I said, a big deal for AMD, for OpenAI, a win getting in some of that share of AMD. We just have to see how long it takes for these buildouts now.
All right. Thank you, Dan. Well, it is the third annual OpenAI Dev Day, providing an early look at what's coming next for OpenAI. This comes as the company has already announced several partnerships in recent weeks. For a closer look, let's welcome in now Intelligent Alpha founder and CEO. That would be Doug Clinton. Doug, always great to see you, my friend. Let's start with OpenAI Sam Altman, Doug, because he's on stage today, right? He's talking to these developers, he's talking to these app builders, Doug, and I'm just curious what you've made so far of what you heard. Did Sam actually have to did he have to say anything, Doug? Are these developers are they already, you know, plenty excited already?
Well, it's great to see you, too, Josh. And I think the answer to your question is there's probably nothing that Sam Altman could say at this point to get developers to be more excited about building on OpenAI. Obviously, I think all these deals that we're talking about AMD, Oracle, Microsoft already, Nvidia, I mean, OpenAI is sort of putting their tentacles into everything. They're partnering with everybody to create the largest infrastructure project we've ever seen. And as part of that, I think deliver the highest quality AI model for anybody who wants to build an AI application. So these devs are already really excited and I'm really curious to hear what they say with Jony Ive later tonight. That might be the real capstone of the event.
Yeah, I definitely want to get to that, Doug. But you know, you mentioned AMD. Let's just take a beat there. This is a monster move for this company, Doug. It's up 25% in today's trade. What do you make of that move, Doug? You look at that and think, okay, yes, hey, that's justified.
I think it is probably justified. I mean, 6 gigawatt, if they do ultimately build anything close to that with AMD, that is a lot of future revenue that you need to sort of write into AMD's forward earnings and projections. And so, it certainly does warrant a move. I would also say though, you know, we're in this sort of like deal economy right now. Like we talked about before, it feels like everybody in this AI ecosystem is sort of doing deals and when the deals get announced, the stocks move up a lot. In many cases, there are substance to these deals, but they're really far out. I mean, we're talking about three, five, seven-year sorts of projects. And so, I think the question for the nearer term is now that we've seen the move in AMD, sort of what's next? What can they show us fundamentally that will justify sustaining this move and maybe even furthering this move? AMD is not a stock that we own at Intelligent Alpha, but I think that is the question just like Intel previously that I would sort of wrestle with.
There was this question about AMD, Doug, about whether you know it was always going to be kind of second fiddle to Nvidia. Do you think a partnership with OpenAI does that does that change that narrative, change that story?
I don't think it does, Josh. I think Nvidia is still absolutely first fiddle, second fiddle, third fiddle. They're still the go-to vendor. And so, everybody has wanted this second source to Nvidia chips. But the reality is, I think Nvidia not only has the chips, but they have kind of the full ecosystem, right? I mean, they've got the connectivity hardware, they've got software, and so it's really hard to get away from Nvidia. And I'll be interested to see, you know, this deal, like I mentioned, it is a multi-year deal. It is kind of out into the future. How much of this AMD capacity OpenAI ultimately puts online relative to Nvidia?
Do you think with this partnership though, Doug, was Sam Altman in some way suggesting that there is no performance gap between Nvidia and AMD that technically they're equals?
I don't know that he would go that far. I don't know that that's the implication because I think again if you think about kind of the entire ecosystem that Nvidia brings. It's still really hard for AMD or any of the other AI focused chip makers to compete with that entire package. And so I think what this deal is really about for OpenAI is saying look we've got a great partner with Nvidia. We're probably going to build mostly with Nvidia chips, but we also want to have this optionality really to pull in AMD provided that their technology continues to evolve and that we need that second source.
You did mention Doug earlier, I want to get your thoughts on this. I do see these headlines that Altman is going to close the event with a chat with Sir Jony Ive the Apple legend himself. I am curious, Doug, what you think we might hear there. You think they tease some OpenAI hardware? You know, if I was an Apple investor, I would be listening very closely.
I think that we are Apple investors and will be listening very closely at Intelligent Alpha. We use AI to do our stock picking and our models have chosen Apple. And I'm curious to hear what OpenAI and Jony have to say. You know, I think the sort of consensus is that a device and announcement is probably still something like a year away and maybe hardware actually in consumer hands another 6 to 12 months after that. So, we're still a little bit away from actually seeing something happen here. But any sort of tea leaves, any sort of indications of how they think kind of hardware and software can be integrated together, just like Apple has done so well for so long, you know, that's the opportunity for OpenAI and I'm curious to hear if they drop any hints about what that might look like from their perspective.
Finally, Doug, I know you own Nvidia, Microsoft, TSM, I believe, too. Any new tickers in the portfolio that you think viewers might be interested in?
I'll give you two tickers, Josh. One is First Solar. This is one that I keep getting surprised, but our models seem to really like First Solar at Intelligent Alpha. And I think it's kind of a derivative play to AI. I mean, solar will be, I think, part of the solution to the energy question. How do we power all these models and these AMD and Nvidia chips? But the other ticker I will give you is actually a new ticker that we just launched, which is GPT. We just rebranded our flagship ETF, the Livermore Atlas ETF. The ticker used to be LIIVR if you've been following us and it's now GPT. We felt like it was such a great ticker. So memorable for the times in AI that we had to launch with it and we're happy that we're now out in the world talking about GPT.
Doug, always great to see you. Always good to have you on the show. Thank you, sir.
Well, coming up, AMD lands a historic OpenAI deal and a major blow for competitor Nvidia. We're speaking with AMD's CEO, Lisa Su. It's an interview you don't want to miss. Plus, politicians are back on the hill today, tasked with striking a deal to fund the federal government. We're going to explore how likely an end to the shutdown might happen. And buy now pay later company Klarna, the darling of Wall Street. We'll explain why that stock is seeing a rise. Those stories and more coming up.
With AMD landing an AI mega deal, our executive editor Brian Sozzi sat down with AMD CEO Lisa Su for more insider details. All eyes are on AMD after a multi-billion dollar deal with OpenAI surprised a lot of folks out there on the street. Very big deal for this company. I want to bring in AMD chair and CEO, Lisa Su. Lisa, it's always good to see you. You never cease to amaze me on these deals you strike and what you've been doing here at AMD since you joined many years ago. Congrats on this news. For investors not familiar with precisely what you announced, I'm taking it as OpenAI and AMD are working together to build the future of AI infrastructure. How do you see it?
Yeah, well, first of all, Brian, it's great to be here with you and yes, today is a big moment for us. Very exciting deal. You know, when you think about where we are today, it is all about AI and how do we use AI to really impact every single industry out there. And the foundation of that is you need to have enough AI compute. And so, yes, what we announced today was a six gigawatt deal. It will be, you know, tens of billions of dollars of revenue to AMD over the next few years. And it's really an opportunity for us to even partner deeper with, you know, the clear market leader in AI. And so, you know, we're talking about building six gigawatts together. You know, the first instantiation will actually go into place the second half next year. We see it ramping to, you know, double digit billions of revenue for us. It's incremental from an AMD standpoint. And most importantly it actually has us working together on the technology because the technology is just super hard. There's so much we have to do to get it all working. And so bringing, you know, the best of OpenAI and AMD together is what this deal is all about.
A deal like this, Lisa, it doesn't happen overnight. You didn't wake up Sunday thinking, 'All right, we're going to announce this on Monday.' When did you start working on it? And how what was it like working with Sam Altman to get this through the finish line?
Well, the key, Brian, and I've told you this before, the key in our world is it's all about roadmap. It's all about the technology. It's all about ensuring that we're meeting the performance capabilities for the most demanding foundational models and that's what OpenAI has. I mean they have brilliant engineers. Their models are used everywhere and so this has been a process. It's been several years in the making. It started with them testing our MI300 and doing some early work on MI300. That moved to MI350. We've done a lot of work on software and it's culminating in they've given us feedback on what they believe best-in-class is and MI450 which we have coming next year is absolutely that it's best-in-class AI computing and the fact is having a team that is so much at the center of the global AI buildout being super excited to be a lead customer for MI450 I think it's a great thing for us it'll push to get the technology out even faster. And yeah, it's been a couple of years in the making, but we're super excited to be able to talk about the breadth and the depth of this relationship as it relates to our overall AI capabilities and AI business.
Lisa, I'm trying hard to make sure I got all these terminologies down correct. So bear with me if I get one wrong. So what would deploying six gigawatts, how does that change the future of AI? And what does that mean to the average person who's only now starting to come across AI agents on various platforms?
Well, Brian, it's a great question. I mean, I think we've all experimented with AI. You know, people think about ChatGPT and Gemini and asking it questions. But what we're seeing is this is really only the very beginning of people taking AI and using it for improving businesses, for improving research, for improving all kinds of capabilities and what we see is to get more capability you need more compute so the work that we're doing is building the foundation of this AI world and what we want is to make sure like every time you have something that you want to use AI for there needs to be able to have enough compute on demand and that's why we're talking about building multiple gigawatts. I mean it is once you build out all six gigawatts I mean you're talking about millions of GPUs and that millions of GPUs will go towards every user having sort of intelligence at their fingertips.
How difficult is it to build out this type of infrastructure?
It's incredibly difficult let me say Brian it is incredibly difficult. But we have been working on this for years and our technology is really around the chips about ensuring that we are constantly looking for pushing the envelope on the next generation so we're really excited about our MI450 generation it has two nanometer technology so the most advanced fabrication capability it has rack scale solutions so we're really putting all of these compute elements together and the way to think about it is it takes a village to build this all. So, we are of course very proud and focused and dedicated on our piece of it. But it's us, it's our cloud service partners. It's obviously OpenAI and the model users. We all need to come together, plan this infrastructure together, make sure there's enough power in the world for all of this AI compute. And once we put it all together, we deliver fantastic capability to the world.
There is not enough but we are actively building everywhere. I mean this is all about ensuring that there's enough power certainly in the United States I think there has been tremendous focus by this administration of ensuring that AI is top of mind and that's super important it's ensuring that we have enough manufacturing capacity to do this it's all of the above and so I would say that the industry is coming together I mean this is one of those points in time where you need every part of the food chain to come together and say we want to do this. We want to build fast. We want to build big. And we're all putting our best efforts towards this big vision.
So much has happened since I last talked to you Lisa. I mean of course this deal is very much front and center. We have the US government now has a stake in Intel which wasn't on my bingo card coming into this year. Some would say these tie-ups are causing risks to the AI industry or even the tech industry. What do you say to those critics?
You know, Brian, I would say that that's probably thinking too small. I mean, you have to really look at what the power of this technology can do for the world. And if you think about all of the applications that can take advantage of AI and computing and the massive investments that will have significant returns on the other end. It takes time to build all this out. So, yes, we are investing heavily. Some might say investing ahead of the curve. I actually say investing at the right pace because we want to accelerate. This is a place where when companies and partners make bold moves it will be rewarded because we will do things that you previously thought weren't possible. We're actually bringing the industry ecosystem together so that we're actually getting the best of each of our teams so that we can actually accelerate the rate and pace of deployment and AI innovation. So I really believe that this is the beginning of a 10-year kind of super cycle and we're in the very early innings of this. I think Brian, I used to say that I thought the AI TAM just for silicon accelerators, sort of our piece of the business was going to be $500 billion. And some people thought, boy, that was a big number. And now maybe I've underestimated that number. And we have a lot of clear demand across the world for this infrastructure.
The US government shutdown enters its sixth day. Lawmakers trying to break the current impasse over competing congressional spending bills. For more on what to expect as negotiations falter. Let's welcome in now MarketWatch correspondent Victor Reklaitis. Victor, it's good to see you. So another vote on deck. Victor, what do we think is going to happen here? Do we think this time enough Democrats might cross the aisle?
No, I don't think there's any expectation of that. I think one thing to watch is, the White House said today, depending on how the vote goes, we might have some more news on whether and if some mass layoffs might hit. So, that's what I'm looking for on that front. Not actually success with the vote, just if there's some more information about layoffs. As you probably remember, last week they said mass layoffs could be coming in a day or two, and that actually hasn't happened. So, that's kind of one key next step.
Victor, I guess we're all trying to figure out when this could end and what are the variables that would depend on. I mean what are the pain points, Victor? What are the pressure points coming up that could force an ending to this?
One's coming up on Friday. That's when some federal employees would be missing their first paycheck. Another one will be on October 15th. So that's the middle of next week. That's when the military could miss its first paycheck. So we've seen in the past when you have something like a missed paycheck, that puts some pressure on Washington. During the last shutdown that ended in January 2019, the Coast Guard missed a paycheck. And that kind of helped put some pressure on Washington. So that's one key pain point that's coming right up.
What does the most recent polling say, Victor, about who the American public's blaming for this? And I'm also curious, whether we have polling of just rank and file Democrats and whether they support this. Victor,
You know, I have to say, both parties seem pretty comfortable with their positions right now. And I think that's one reason why it's looking like this shutdown could go on for a while. We look at betting markets as one thing. They're not always right. Sometimes they're wrong. But it does give you a sense of maybe what a consensus is. And Kalshi is showing like 21, 22 days is how long the shutdown could go for. And I think a lot of that is just because the Democratic message is they need to fight against Trump and the Republicans. This is time to stand up. Whereas on the Republican side they're saying we have the clean continuing resolution. Democrats should support that. What they're trying to add with Obamacare subsidies is an extraneous thing. So I'm not totally convinced on any of the polling. I think I would just more say that right now both sides seem pretty comfortable. That could change at any time, but right now that's how it looks.
Do you believe, Victor, I mean, I guess I'm trying to figure out who we think has the more compelling argument. I mean, if the GOP's messaging is, listen, we can talk about the Obamacare tax credits, but we can discuss that, but not during a shutdown. Do you think that is more compelling to the American public?
I think we're so divided it kind of comes down to each partisan feels they have the stronger side, but it's really hard for me at the moment to say who's winning. If it was clear, then we'd have a better chance of the shutdown looking like it was going to end soon, but we don't have that right now.
What about the theory, Victor, that Schumer is doing this for a few different reasons, but one primary reason is because he's concerned about AOC primarying him. What do you make of that theory?
