AMD joins $1 trillion club as chipmakers rally on AI-driven demand

Advanced Micro Devices (AMD) has briefly surpassed a market capitalization of $1 trillion (S$1.28 trillion) for the first time, joining an exclusive club of chipmakers to achieve this milestone, according to a report on September 21. The company's shares surged by 9% to $610, reaching an all-time high of $613.92, creating a valuation of just over $1 trillion.

This achievement marks a stellar rally for AMD, which is considered the closest rival to AI bellwether Nvidia in the graphics processing unit (GPU) market. AMD has become the fourth US chipmaker to top a $1 trillion valuation, following Nvidia, Broadcom, and Micron. Nvidia became the world's most valuable company, worth more than $5 trillion, after crossing the mark in 2023.

AMD has expanded its AI product offerings and moved beyond selling individual chips to providing complete systems that combine processors, networking gear, and related hardware, allowing it to compete with Nvidia's products. The company is also benefiting from the rising demand for central processing units (CPUs) used alongside graphics processors in servers handling inference tasks, which has helped AMD gain market share from Intel.

Early in August, AMD projected quarterly revenue above Wall Street estimates, which fell short of investor expectations, causing its stock to drop by over 7% on the day. On September 21, most chip stocks saw surges, with Intel jumping around 11%, Qualcomm rising 4.1%, and the broader chip index gaining 2.6% to a one-month high.