Advanced Micro Devices Inc. took this rocket ride on Monday, as the company’s stock soared, briefly boosting its market capitalization by roughly $100 billion at an intraday high, after the chipmaker signed a deal with OpenAI that could lead to billions of dollars in revenue. AMD’s shares extended gains into a second day, rising as much as 7.5% in early trading on Tuesday. This follows a 36% jump in Oracle Corp. shares last month, which added $255 billion to the software firm’s market value in a single session, after it gave blockbuster guidance for its cloud business, including an agreement with the ChatGPT operator worth $300 billion over five years. 

“If any one of these deals falls through it has this domino effect downstream that I think is concerning,” said Brian Mulberry, client portfolio manager at Zacks Investment Management Inc., which has about $12 billion in assets. “It reminds me of what happened with telecom back in the mid-nineties.”

The moves come amid growing concern about a bubble forming around artificial intelligence as the key players — namely Nvidia Corp. and OpenAI — pledge billions of dollars in deals with a cohort of companies making infrastructure for the technology. As more money is spent, there’s mounting fear that the trend will end in a crash the way it did 25 years ago following the dot-com euphoria, when heavy investments were made in anticipation of internet traffic that took much longer to materialize.

An unwinding could be even more painful today, as the top tech stocks account for roughly 35% of the S&P 500 Index, compared with less than 15% in 1999.  

“The market is pricing these deals as if everyone who transacts with OpenAI will be a winner,” said Michael O’Rourke, chief market strategist at Jonestrading. “OpenAI is a negative cash flow company and has nothing to lose by signing these deals. Investors should be more discerning. But this is a buy-first, ask-questions-later environment.”

Hedge fund billionaire Paul Tudor Jones said the current backdrop reminds him of the dot-com bubble in an interview with CNBC’s Squawk Box on Monday. 

“All the ingredients are in place for some kind of a blow off,” he said. “Will it happen again? History rhymes a lot, so I would think some version of it is going to happen again,” adding that this environment is “more potentially explosive than 1999.” 

One of the big concerns about the deals is their circular capital structures, with the companies using each other’s money to buy each other’s products, Mulberry said.

In addition, the scale of the stock market moves for such large companies is alarming, he said. These are companies with “very large mature balance sheets that are participating in these types of rallies,” Mulberry said. “That is unusual, and it does cause a little bit of reflection.”

To be sure, AMD’s climb may be justified because the OpenAI deal signifies a major step in its progress with graphics processing units, or GPUs, where it competes for market share with Nvidia. Wall Street analysts covering AMD generally cheered the news. 

“This agreement fundamentally shifts how the industry will view AMD’s competitive position going forward,” Benchmark analyst Cody Acree wrote in a note to clients on Monday, boosting the firm’s price target to $270 from $210. “Beyond the obvious revenue and earning accretion of the agreement, we believe this announcement is a ringing endorsement of AMD’s increasingly competitive position as a viable technical alternative to Nvidia’s AI GPU dominance.” 

Still, having multiple large technology stocks surge by double-digits in quick succession could be a sign that valuations have become disconnected from underlying fundamentals, and that investors are buying primarily based on the fear of missing out on further gains.  

“The price discovery is actually pretty scary,” Ted Mortonson, a technology strategist at Robert W. Baird & Co., said after Oracle’s pop.

A company that large, gaining so much market value that rapidly is “not good and normal,” he added. “I would call it a part of the exuberance bundle.”