Sanmina drops following Monday's surge on AMD, OpenAI deal

[Server racks full of routers, switches and servers aligning on both sides of an aisle of a data center. Illustration of the concept of cloud computing and infrastructure as a service (IaaS)]
Dragon Claws

Sanmina (SAMN) shares plunged 8% during Tuesday market action following its nearly 23% surge on Monday related to the AI infrastructure deal [https://seekingalpha.com/news/4501935-amd-surges-25-after-ai-infrastructure-deal-with-openai] between Advanced Micro Devices (NASDAQ:AMD [https://seekingalpha.com/symbol/AMD]) and OpenAI (OPENAI [https://seekingalpha.com/symbol/OPENAI]).

Sanmina is in the process of acquiring AMD's ZT Systems [https://seekingalpha.com/news/4450016-amd-to-sell-zt-systems-data-center-infrastructure-manufacturing-unit-to-sanmina-for-3b], its data center infrastructure manufacturing business, for $3B in cash and stock. As part of the transaction, Sanmina becomes a preferred new product introduction manufacturing partner for AMD cloud rack and cluster-scale AI solutions. It is expected to close by the end of this year.

"Sanmina's stock soared on expectations that ZT Systems would provide the manufacturing for AMD’s platform for OpenAI," said Chris Lau [https://seekingalpha.com/article/4828170-sanmina-shares-surged-what-to-do-reiterate-hold], a Seeking Alpha contributor and analyst who runs the group DIY Value Investing [https://seekingalpha.com/affiliate_link/freefollwr20]. "Shareholders may need to wait for ZT Systems to formally announce that it is providing some of the manufacturing, advanced liquid cooling capabilities, and end-to-end solutions to OpenAI."

MORE ON SANMINA AND AMD

* AMD Upwards: Nvidia Finally Gets A Credible Contender (Upgrade) [https://seekingalpha.com/article/4828291-amd-upwards-nvidia-finally-gets-a-credible-contender-upgrade]
* AMD: All Priced In Now? What's Happened In Wall Street Models [https://seekingalpha.com/article/4828188-amd-stock-all-priced-in-now-whats-happened-in-wall-street-models]
* Sanmina Shares Surge: What To Do [https://seekingalpha.com/article/4828170-sanmina-shares-surged-what-to-do-reiterate-hold]
* Oracle's documents show financial challenges of renting out Nvidia's chips: report [https://seekingalpha.com/news/4502414-oracles-documents-show-financial-challenges-of-renting-out-nvidias-chips]
* Piper Sandler finds AMD's new deal with OpenAI as 'highly accretive' [https://seekingalpha.com/news/4502409-piper-sandler-finds-amds-new-deal-with-openai-as-highly-accretive]