AMD shares hit record high, spark global chips rally on AI demand optimism

Advanced Micro Devices' shares jumped to an all-time high on Wednesday as its strong outlook ​boosted investor confidence about sustained demand for AI infrastructure, sparking a rally across global semiconductor stocks.

AMD jumped 14.9% and was ‌set to add more than $86 billion in market value, if gains hold. Rival Intel also rose 1.9% to a record high, while chip designer Arm Holdings surged 10.1% and chipmaker Qualcomm gained 1.6%.

Analysts and investors see AMD as a leading challenger to Nvidia's dominance in AI chips, with the company also seen benefiting from its focus on ​CPUs. Like rivals Nvidia and Intel, AMD late on Tuesday said a shift toward "inference," where AI models are deployed in real-world applications, is opening ​up fresh opportunities for its server CPUs.

Central processing units have taken center stage as companies and businesses gravitate towards ⁠agentic AI - systems that perform autonomous functions - broadening demand beyond graphics processing units, or GPUs, that are used to train large models.

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"Success invites competition, ​and while Nvidia held a monopoly on the AI chip market for two years, other players have been catching up. Simultaneously, the pie has grown, ​leaving room for growth," said Michael O'Rourke, chief market strategist at JonesTrading.

AMD now expects the server CPU addressable market to grow by more than 35% annually through 2030, up from a prior forecast of 18%. "AMD's story is no longer just about having a GPU pipeline to challenge Nvidia... It's increasingly about a broader compute opportunity, with CPUs ​and GPUs both playing a role as AI workloads become more demanding," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

At least 20 brokerages ​raised their price target on AMD stock, with Evercore ISI's new target of $579 now the highest on Wall Street, according to LSEG data.

AMD trades at about 42.4 ‌times forward ⁠earnings, well above its five-year average of 30 and nearly double Nvidia's roughly 21‑times multiple, despite the latter's much larger AI market share. The Philadelphia SE Semiconductor index advanced 2.7% on Wednesday to hit a fresh record high.

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The index has already surged more than 59% this year, including a more than 38% jump in April alone, its best showing since at least October 2000, according to LSEG data.

Chipmakers that are part of the S&P 500 semiconductor ​index are expected to record a ​robust 109.8% earnings growth for ⁠the first quarter, the highest among sub-sectors under the broader S&P 500 information technology sector, according to LSEG data.

Earlier in the day, Samsung Electronics became only the second Asian company to reach $1 trillion in market value, catapulted by ​an AI-powered rally. Rival SK Hynix's stock has also more than doubled in value so far this year.
European ​semiconductor giants ASML ⁠and ASMI also climbed 5.7% and 3.5%, respectively, on Wednesday.

SUPER MICRO RALLY SHRUGS OFF LEGAL CLOUDS

AI server maker Super Micro also surged 14.3% after forecasting fourth-quarter revenue and profit above expectations, reassuring investors rattled by a recent US Justice Department case linked to illegal chip shipments to China.

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The outlook underscores strong demand for Super Micro's ⁠customizable, high‑performance ​AI servers from data-center operators and startups.

CEO Charles Liang said demand was also strong for ​its broader data-center and cloud software offerings, while production sites in Taiwan, Malaysia and the Netherlands are ramping up aggressively. Rival Dell rose 5.5%, while Hewlett-Packard Enterprise inched 0.2% lower.