AMD Shares Surge On AI Optimism As Global Chip Stocks Rally
Shares of Advanced Micro Devices surged to a record high on Wednesday after the company delivered a strong outlook that reinforced investor confidence in long-term demand for artificial intelligence infrastructure.
AMD shares jumped 14.9% and were on track to add more than $86 billion in market value if gains hold. The rally also lifted semiconductor stocks worldwide as investors continued to bet heavily on the expanding AI market.
Rival chipmakers and designers joined the advance. Intel rose 1.9% to a record high, while Arm Holdings gained 10.1%. Qualcomm also climbed 1.6% during the session.
AI Inference Boosts CPU Demand
Analysts increasingly view AMD as one of the strongest challengers to Nvidia’s leadership in AI chips. Investors also see the company benefiting from its growing focus on central processing units, or CPUs.
AMD said on Tuesday that the rapid shift toward AI “inference” is creating new opportunities for server CPUs. Inference refers to the deployment of trained AI models into real-world applications.
Like Nvidia and Intel, AMD expects growing demand from businesses adopting agentic AI systems that can perform autonomous functions. As a result, CPUs are becoming more important alongside graphics processing units, or GPUs, which are traditionally used to train large AI models.
Michael O’Rourke, chief market strategist at JonesTrading, said the expanding AI market is creating room for multiple chipmakers to grow despite Nvidia’s early dominance.
Meanwhile, AMD raised its forecast for the server CPU addressable market. The company now expects annual growth of more than 35% through 2030, sharply above its earlier estimate of 18%.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said AMD’s growth story is increasingly centred on broader computing demand rather than only competing with Nvidia in GPUs.
Brokerages Raise AMD Price Targets
Investor optimism strengthened further after at least 20 brokerages raised their price targets on AMD shares.
Evercore ISI issued the highest target on Wall Street at $579, according to LSEG data.
AMD now trades at roughly 42.4 times forward earnings. That figure stands well above its five-year average of 30 times earnings and nearly double Nvidia’s valuation multiple of around 21 times.
Despite Nvidia maintaining a significantly larger share of the AI chip market, investors appear willing to pay a premium for AMD’s future growth potential.
Semiconductor Stocks Extend Global Rally
The broader semiconductor sector also continued its powerful rally on Wednesday.
The Philadelphia Semiconductor Index advanced 2.7% to a fresh record high. The index has already surged more than 59% this year, including a jump of more than 38% in April alone, marking its strongest monthly performance since at least October 2000, according to LSEG data.
LSEG also estimated that companies in the S&P 500 semiconductor index are expected to post earnings growth of 109.8% for the first quarter, the highest among information technology sub-sectors.
In Asia, Samsung Electronics became only the second Asian company to surpass a $1 trillion market valuation as enthusiasm around AI-related stocks intensified. SK Hynix shares have also more than doubled this year.
European semiconductor firms joined the rally as well. ASML climbed 5.7%, while ASMI rose 3.5%.
Super Micro Shares Jump Despite Legal Concerns
AI server manufacturer Super Micro Computer also posted strong gains, with shares rising 14.3% after the company forecast fourth-quarter revenue and profit above Wall Street expectations.
The upbeat outlook reassured investors following concerns linked to a recent U.S. Justice Department case involving illegal chip shipments to China.
Super Micro said demand remains strong for its customisable high-performance AI servers among data-centre operators and start-ups.
Chief executive Charles Liang added that the company is also seeing robust demand for its wider data-centre and cloud software offerings. He said production facilities in Taiwan, Malaysia and the Netherlands are rapidly expanding capacity.
Elsewhere, Dell Technologies rose 5.5%, while Hewlett Packard Enterprise edged 0.2% lower.
With inputs from Reuters