Networking and artificial intelligence-related stocks jumped on Tuesday, following the news of the megadeal between AMD (AMD) and Meta Platforms (META).
Arista Networks (ANET) shares rose almost 6% in premarket trading, while Ciena (CIEN) and Cisco (CSCO) also saw gains. Lumentum (LITE), which makes optical networking equipment, also rose more than 1% in premarket trading, as did Coherent (COHR). Also seeing gains were Celestica (CLS), Arm (ARM), and Taiwan Semiconductor (TSM), which manufactures chips for AMD.
On Tuesday, AMD announced that Meta intends to spend “double-digit billions” per gigawatt on AMD chips and equipment, as part of a 6-gigawatt deal. The companies said the multi-year, multi-generation agreement expands an existing partnership and aligns roadmaps across silicon, systems, and software to deliver AI platforms purpose-built for Meta’s workloads.
Under the agreement, AMD issued Meta a performance-based warrant for up to 160M AMD common shares, structured to vest as specific milestones associated with Instinct GPU shipments are achieved.
“This multi-year, multi-generation collaboration across Instinct GPUs, EPYC CPUs, and rack-scale AI systems aligns our roadmaps to deliver high-performance, energy-efficient infrastructure optimized for Meta’s workloads, accelerating one of the industry’s largest AI deployments and placing AMD at the center of the global AI buildout,” said AMD’s Chair and CEO Dr. Lisa Su.
AMD shares rose more than 10% in premarket trading following the announcement, while Meta shares slipped 0.7%. Nvidia (NVDA), which recently signed a multi-year deal of its own with Meta, fell fractionally.