So here’s the thing about AI stocks right now: they’re basically like that friend who gets invited to every party just because they know the right people. Except in this case, the “right people” is OpenAI, and the “party” is Wall Street going absolutely bonkers.
Take Figma, for example. Sam Altman literally just mentioned their name at a conference, and boom – 17% surge. Five straight days of gains. The stock’s up 41% in a week just because ChatGPT users might use their design software. That’s not investing, that’s basically financial astrology at this point.
AMD is having an even wilder ride. They cut a deal with OpenAI to sell chips in exchange for OpenAI potentially owning 10% of the company. The stock jumped 11% yesterday and is up 43% in five days. It’s like watching your friend get rich because they lent their car to someone famous.
But here’s where it gets really spicy: according to Morgan Stanley, AI companies (mostly the Magnificent 7 plus about 34 data center buddies) are responsible for 75% of the S&P 500’s gains this year. That’s not diversification – that’s putting all your eggs in one very shiny, very expensive basket.
The kicker? A lot of these deals are basically financial musical chairs. Nvidia gives money to OpenAI, OpenAI uses that money to buy AMD chips. It’s like vendor financing with extra steps and a lot more hype. AMD’s CEO Lisa Su thinks we’re in an AI “supercycle” that’ll last a decade, but let’s be real – we’ve heard that song before.
Remember the dot-com boom? Yeah, that was also going to last forever. Until it didn’t.
The smart money is starting to get nervous. When analysts start writing articles titled “This is how the AI bubble will pop,” maybe it’s time to pay attention. Gold hitting $4,000 an ounce isn’t just inflation hedge behavior – it’s “maybe I should diversify away from companies whose entire value proposition is ‘OpenAI likes us'” behavior.
Don’t get me wrong – AI is revolutionary. It’s changing everything. But when a single company’s conference mentions can move billions in market cap, we might be getting a little ahead of ourselves. It’s like the entire market is that person who buys a stock because their Uber driver mentioned it.
The Fed’s Jerome Powell is speaking today, and everyone’s waiting to see if more rate cuts are coming. But honestly, when AI partnerships are driving more market movement than actual monetary policy, maybe we need to step back and ask if we’re all just playing a very expensive game of telephone.
Bottom line: OpenAI is the cool kid everyone wants to sit with at lunch. But remember what happened to most of the cool kids from high school? They peaked early.
Stay smart out there.