Advanced Micro Devices, known as AMD, saw its market value surpass $1 trillion for the first time during Monday’s trading session after its shares rose about 9.6% to more than $613, hitting a record high as investors bet on the company’s expansion in the artificial intelligence chip and computing market.
Fourth U.S. chipmaker to surpass $1 trillion
AMD became the fourth U.S. chipmaker to surpass $1 trillion in market value, following Nvidia, Broadcom and Micron. The company’s shares have gained more than 180% since the start of the year and rose about 24% over five consecutive sessions as inflows returned to artificial intelligence stocks.
Expansion in AI systems and data centers
AMD is Nvidia’s closest competitor in the market for graphics processing units used in artificial intelligence applications. The company is accelerating product launches and shifting from selling chips individually to offering integrated systems that combine processors, networking equipment and other components.
The company has benefited from rising demand for central processing units used alongside graphics processors in artificial intelligence servers, helping it increase its market share at Intel’s expense. AMD’s second-quarter results showed revenue rising 50% year on year to $11.54 billion, while revenue from its data-center segment jumped 107% to $6.7 billion.
AMD Chief Executive Lisa Su expects data-center sales to double by 2027. Although AMD’s market value has surpassed $1 trillion, it remains far behind Nvidia, whose market value exceeds $5 trillion.
Broader gains for chip stocks
AMD’s rise came amid a broader wave of gains in chip stocks. Intel shares rose about 11.8%, Qualcomm gained 4.5%, and the semiconductor sector index climbed 2.7% to its highest level in more than a month.
Enthusiasm for chip stocks had waned in recent months as scrutiny intensified over the scale of major technology companies’ artificial intelligence spending, alongside higher oil prices and expectations that interest rates would remain elevated for longer. The return of inflows into artificial intelligence stocks then helped fuel the latest rally.
