Well, yesterday was one of those days that reminds you why it’s not worth getting carried away.
Over the past few days, as we discussed in yesterday’s newsletter, the headlines have been filled with panic and doom. An AI bubble, concerns about model safety, people saying that the party was over.
And then, suddenly, within a single trading session, the mood turned around.
Of course, two stocks stood out in a way that was impossible to ignore. AMD and Meta. One entered a club with very few members. The other surged immediately after Facebook went down.
AMD JOINS THE $1 TRILLION CLUB
Let’s start with the star of the day.
AMD’s stock jumped 9.95%, reaching $615.52 and setting an all-time high. And that’s where the big milestone happened: the company’s market capitalization surpassed $1 trillion for the first time.
Yes, you read that correctly. One trillion.
AMD is the fourth U.S. chip company to reach that milestone, after Nvidia, Broadcom, and Micron. And this wasn’t just a random day. It was the fifth consecutive positive close, with the stock gaining around 22% over those five sessions and more than 170% since the beginning of the year.
“And why is it running like this?” you might be wondering.
The answer is one word: data centers.
In the second quarter, the company generated $11.54 billion in revenue, up 50% from $7.69 billion a year earlier. And the data center segment alone generated $6.7 billion, up 107%. In other words, it doubled in just one year.
And things get even more interesting here. CEO Lisa Su said she expects data center sales to double again in 2027, reaching around $70 billion. The company itself is talking about a total addressable market that could reach $2 trillion by 2030.
Analysts have gotten the message. Of the 55 analysts covering the stock, 39 say “buy,” with an average price target of $617. Stifel has a $635 target, while Raymond James has a $641 target.
Of course, there is a big “but.” The higher the stock goes, the less room there is for disappointment. And let me remind you of something: last Monday, the same stock lost 5.6% in a single day after industry executives talked about slower growth in AI models. And then it ended the week up 8%. These are some serious swings.
FACEBOOK WENT DOWN, THE STOCK WENT UP
And now we come to the second part, which is rather amusing.
On Sunday night, Facebook and Instagram went down. Downdetector recorded more than 17,000 reports for Facebook and more than 5,000 for Instagram, and it took around two hours for things to get back to normal.
And what did the stock do on Monday? It was up around 5% in the morning, near $699, and during the day the gain exceeded 11%, with the stock reaching $741. Meta is heading toward its best month in 13 years.
You might be asking... how does that happen?
Simple. Nobody was looking at the outage. Everyone was looking at something else.
And that something is called Muse.
Muse is Meta’s personal AI agent, which doesn’t simply answer questions, but actually gets things done: it sends emails, fills out forms, books trips, and makes purchases. It launched earlier this month and has just reached No. 1 on the U.S. App Store, knocking ChatGPT out of the top spot.
Wells Fargo raised its price target from $640 to $796, with analyst Ken Gawrelski saying that Meta “now has a story to tell” when it comes to artificial intelligence.
And as if that wasn’t enough, the company also announced Petal, the first petabit-capacity subsea cable connecting the U.S. and France. All of this came just two days before Wednesday’s Meta Connect conference.
Obviously, not everything is perfect.
During internal testing, Muse bypassed its safety guardrails and displayed photos from a user’s iCloud, while it also got stuck on tasks without reporting that it had failed.
Meta, however, says it will release an encrypted version by the end of the year.