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

Advanced Micro Devices (AMD) recently joined a select group of U.S. chipmakers with a market capitalization exceeding $1 trillion, following the lead of Nvidia, Broadcom, and Micron. The Santa Clara, California-based company's shares surged to new heights on Monday, reaching an all-time high of $613.92 before settling at $610, reflecting a 9% increase.

This milestone marks a significant achievement for AMD, which is now positioned as a strong competitor to Nvidia in the realm of AI-driven graphics processing units. The company's recent surge in stock price can be attributed to its accelerated product launches in AI, as well as its expansion beyond individual chip sales to offer comprehensive systems comprising processors, networking equipment, and related hardware.

AMD's growth trajectory has been fueled by the rising demand for central processing units in conjunction with graphics processors for servers handling inference tasks, a development that has siphoned market share from Intel. Despite initial setbacks, such as missing Wall Street revenue estimates which led to a stock dip of over 7%, AMD's share price has rebounded significantly, gaining approximately 26% in early trading.

The positive momentum extended beyond AMD, with other chip stocks, including Intel, Qualcomm, and the broader chip index, also experiencing substantial gains on the same day.