Advanced Micro Devices closed above $1T in market value for the first time on Monday, after shares hit an intraday record.
AMD is the fourth US chipmaker to cross the mark, after Nvidia, Broadcom, and Micron. Nvidia crossed in 2023 and is now the world's most valuable company, worth more than $5T.
The rally spread across the sector. Intel and Arm Holdings both saw double-digit increases. The Philadelphia Semiconductor Index climbed more than 4%, its fifth straight session of gains.
The consumer AI app that lit the fuse
Meta Platforms' Muse AI Agent reached the top slot among Apple's App Store free apps after launching earlier this month.
That sent investors hunting for the chipmakers supplying processors for agentic AI workloads. Meta stock rose more than 7% on Monday.Meta is also AMD's second-biggest customer, accounting for ~5.5% of its revenue.
"As AI agents gain broader consumer adoption, demand for server CPUs should benefit."
Jacky He, Jefferies
The data center business is doing the work
Second-quarter revenue reached $11.54B, up 50% a year earlier. The Data Center unit delivered $6.7B of that, up 107% year over year. First-quarter revenue was $10.25B, with the data center segment at $5.78B.
CEO Lisa Su told investors last month the company expects to double data center sales in 2027. AMD has also moved beyond selling individual chips, packaging processors, networking gear, and related hardware into complete systems to compete with Nvidia.
Rising demand for server CPUs used alongside GPUs for inference has helped it take share from Intel. The path here was not smooth. AMD shed nearly 26% from its June peak to its July trough before gaining about 30% in September.
"Money is moving back into the AI trade," said Thomas Hayes, chairman at Great Hill Capital.
Valuation is the open question. AMD last traded at around 41 times forward earnings, below its 10-year average of 44 but well above Nvidia's 16.3 times.
Nvidia CEO Jensen Huang said last week he expects to double the number of chips his company ships next year. For AMD, the $1T badge now sets a higher bar for every quarter that follows.
