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

Advanced Micro Devices (AMD) has achieved a market capitalization of over $1 trillion for the first time, marking a significant milestone in the chipmaking industry. This surge in value is driven by investor confidence in AMD's expanding role in AI computing. The shares of the Santa Clara, California-based company were last up 9.6 percent at $613.31, reaching a record high.

AMD's achievement makes it only the fourth US chipmaker to reach this valuation, following Nvidia, Broadcom, and Micron. While Nvidia holds the title of the world's most valuable company, worth over $5 trillion, AMD's milestone highlights the growing importance of AI in the market. Thomas Hayes, chairman of Great Hill Capital LLC, noted that there is renewed enthusiasm for chipmakers as the AI trade regains money.

Previous concerns over AI spending by large technology companies and higher oil prices due to geopolitical tensions, along with expectations of sustained interest rates, had dampened investor enthusiasm. However, now, investors are convinced that AI is the only sector that can thrive in the economic environment influenced by the Federal Reserve's policies.