Options Market Statistics: AMD to Acquire ZT Systems for $4.9 Billion, Options Pop

Options Newsman joined discussion · Aug 20, 2024 09:09

News Highlights

$NVIDIA (NVDA.US)$ stock increased 4.35%. Its options trading volume was 4.05 million. Call contracts account for 62.0% of the total trading volume. The $125 calls expiring August 23 were traded most actively.

Nvidia stock surged over 4% on Monday, marking one of the largest gains in the S&P 500. The rise was driven by Goldman Sachs reaffirming its positive outlook on the company. Nvidia's stock has been recovering from a sharp decline earlier this month, bolstered by enthusiastic endorsements from major Wall Street firms like Goldman Sachs, Bank of America, and UBS.

Analysts are optimistic about robust demand from cloud service providers driving Nvidia's data center performance, despite concerns over the delayed launch of its next-generation chip architecture, Blackwell. Nvidia's stock has gained 31% over the past eight trading sessions, nearing its all-time closing high of $135.58, with shares ending Monday at $130.00.

The company is set to release its quarterly earnings report on August 28, with expectations high given its recent history of exceeding market forecasts.

$Advanced Micro Devices (AMD.US)$ stock rose 4.52%. Its options trading volume was 0.73 million. Call contracts account for 72.3% of the total trading volume. The $150 calls expiring August 23 were traded most actively.

AMD plans to acquire server maker ZT Systems for $4.9 billion to enhance its AI chips and hardware portfolio, competing with Nvidia. The deal will be 75% cash and 25% stock, utilizing AMD's $5.34 billion in cash and investments. The acquisition aims to meet the growing AI computing demands by integrating more advanced server systems.

CEO Lisa Su highlighted AI systems as a top priority. ZT Systems' engineers will help AMD rapidly deploy AI GPUs for cloud giants like Microsoft. AMD shares rose over 2% on the news. The acquisition is expected to boost AMD's data center customer base and long-term revenue.

Post-acquisition, AMD will divest ZT Systems' server manufacturing business, retaining about 1,000 of ZT Systems' 2,500 employees. ZT Systems generates $10 billion in annual revenue, mostly from manufacturing. The deal is set to close in the first half of 2025, with the divestment within 12 to 18 months.

AMD expects the acquisition to positively impact its financial performance by the end of 2025 and accelerate revenue growth in 2026. The acquisition will help AMD expand its cloud customer base and engineering capabilities. AMD projects $4.5 billion in AI chip revenue this year, competing with Nvidia's expected $105.9 billion from its data center segment.

$FuboTV (FUBO.US)$ stock surged 17.65%. Its options trading volume was 0.26 million. Call contracts account for 84.2% of the total trading volume. The $2.5 calls expiring Sep. 20 were traded most actively.

Shares of fuboTV surged after the company won a preliminary injunction against the Venu Sports joint venture by Disney, FOX, and Warner Bros. Discovery. The injunction prevents the JV, which Fubo argued would monopolize 60%-80% of live sports content, reducing competition and increasing prices. CEO David Gandler called the ruling a win for consumers, ensuring a competitive sports streaming market.

Despite the share spike, fuboTV remains highly volatile, with significant fluctuations over the past year. The stock is down 43.4% year-to-date, trading at $1.80 per share, 50% below its 52-week high.

Options Market Statistics: AMD to Acquire ZT Systems for $4.9 Billion, Options Pop

Unusual Stock Options Activity

There was a noteworthy activity in $Halliburton (HAL.US)$, where $33 calls have topped volume to open interest ranking. The highest volume over open interest ratio reaches 134.9x with 13,756 contracts.

Daily Active Index & Sector ETF Options

Source: Barchart, Unusual Whales, The Guardian, Bloomberg

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