By Rashika Singh and Shashwat Chauhan
May 6 (Reuters) – Advanced Micro Devices’ shares jumped to an all-time high on Wednesday as its strong outlook boosted investor confidence about sustained demand for AI infrastructure, sparking a rally across global semiconductor stocks.
AMD jumped 14.9% and was set to add more than $86 billion in market value, if gains hold. Rival Intel also rose 1.9% to a record high, while chip designer Arm Holdings surged 10.1% and chipmaker Qualcomm gained 1.6%.
Analysts and investors see AMD as a leading challenger to Nvidia’s dominance in AI chips, with the company also seen benefiting from its focus on CPUs.
Like rivals Nvidia and Intel, AMD late on Tuesday said a shift toward “inference,” where AI models are deployed in real-world applications, is opening up fresh opportunities for its server CPUs.
Central processing units have taken center stage as companies and businesses gravitate towards agentic AI – systems that perform autonomous functions – broadening demand beyond graphics processing units, or GPUs, that are used to train large models.
“Success invites competition, and while Nvidia held a monopoly on the AI chip market for two years, other players have been catching up. Simultaneously, the pie has grown, leaving room for growth,” said Michael O’Rourke, chief market strategist at JonesTrading.
AMD now expects the server CPU addressable market to grow by more than 35% annually through 2030, up from a prior forecast of 18%.
“AMD story is no longer just about having a GPU pipeline to challenge Nvidia… It’s increasingly about a broader compute opportunity, with CPUs and GPUs both playing a role as AI workloads become more demanding,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
At least 20 brokerages raised their price target on AMD stock, with Evercore ISI’s new target of $579 now the highest on Wall Street, according to LSEG data.
AMD trades at about 42.4 times forward earnings, well above its five-year average of 30 and nearly double Nvidia’s roughly 21‑times multiple, despite the latter’s much larger AI market share.
The Philadelphia SE Semiconductor index advanced 2.7% on Wednesday to hit a fresh record high.
The index has already surged more than 59% this year, including a more than 38% jump in April alone, its best showing since at least October 2000, according to LSEG data.
Chipmakers that are part of the S&P 500 semiconductor index are expected to record a robust 109.8% earnings growth for the first quarter, the highest among sub-sectors under the broader S&P 500 information technology sector, according to LSEG data.
Earlier in the day, Samsung Electronics became only the second Asian company to reach $1 trillion in market value, catapulted by an AI-powered rally. Rival SK Hynix’s stock has also more than doubled in value so far this year.
European semiconductor giants ASML and ASMI also climbed 5.7% and 3.5%, respectively, on Wednesday.
SUPER MICRO RALLY SHRUGS OFF LEGAL CLOUDS
AI server maker Super Micro also surged 14.3% after forecasting fourth-quarter revenue and profit above expectations, reassuring investors rattled by a recent U.S. Justice Department case linked to illegal chip shipments to China.
The outlook underscores strong demand for Super Micro’s customizable, high‑performance AI servers from data-center operators and startups.
CEO Charles Liang said demand was also strong for its broader data-center and cloud software offerings, while production sites in Taiwan, Malaysia and the Netherlands are ramping up aggressively.
Rival Dell rose 5.5%, while Hewlett Packard Enterprise inched 0.2% lower.
(Reporting by Rashika Singh and Shashwat Chauhan in Bengaluru; Editing by Leroy Leo)
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