Advanced Micro Devices (AMD) shares climbed on Wednesday as investors returned to the semiconductor sector, pushing the stock toward a market capitalization milestone that it has never previously reached.
The chipmaker’s shares gained 4.02% to $542.52, after trading as high as $546.44 during the session.
The advance put AMD on pace for a record closing high and brought its valuation closer to the $900 billion mark.
According to Dow Jones Market Data, AMD would need to reach $551.94 per share to achieve a $900 billion market value.
The company’s market capitalization stood at approximately $850 billion at Tuesday’s close.
The rally came as investors looked past concerns triggered earlier in the week after Nvidia introduced a new artificial intelligence chip designed for personal computers, a move that initially weighed on traditional CPU manufacturers.
Chip stocks rebound after Nvidia-driven selloff
AMD, Intel, and other semiconductor names came under pressure on Monday after Nvidia unveiled its latest AI PC chip, raising questions about increased competition in the central processing unit market.
However, sentiment improved markedly by Wednesday. Intel shares rose 4.43%, putting the stock on track to end a five-session losing streak.
At the Computex conference in Taiwan, Intel Chief Executive Officer Lip-Bu Tan highlighted ongoing strength in processor demand.
According to the Taipei Times, Tan said demand for CPUs remains robust and noted that several chief executives had recently contacted him seeking additional supply.
The broader semiconductor sector has continued to benefit from investor enthusiasm surrounding artificial intelligence infrastructure spending, despite periodic concerns about competitive pressures among major chipmakers.
Morgan Stanley analysts, led by Shawn Kim, argued that AI-driven demand is reshaping multiple industries through its impact on semiconductor supply chains.
“What began as an AI infrastructure bottleneck is now spreading into hardware margins, device affordability, cloud costs, inflation, and policy,” Kim wrote.
Analysts see AI inference creating opportunities
Despite concerns about rising memory prices and supply constraints, Morgan Stanley believes AMD is well-positioned to benefit from the next phase of AI adoption.
“Agentic AI-driven CPU demand structurally favors AMD in cloud share gains,” Kim wrote, adding that investors should have Nvidia and Micron Technology exposure where AI token growth capital expenditures can more directly translate into earnings upside.
The positive outlook has been echoed by other market analysts.
Seeking Alpha analyst Andres Veurink recently upgraded AMD to a Strong Buy rating, citing growing demand for AI inference workloads and the company’s competitive position relative to Nvidia.
According to his analysis, AMD’s advantages in memory capacity, power efficiency, and cost structure could allow it to capture a meaningful share of the AI inference market over the remainder of the decade.
The report also pointed to accelerating data center capital expenditures and AMD’s established presence in the CPU market as factors supporting future revenue and earnings growth.
Wall Street remains broadly optimistic
Investor sentiment toward AMD remains largely positive following the stock’s strong performance this year.
Among the 58 analysts surveyed by FactSet, the stock carries an average Overweight rating with a consensus price target of $491.32.
AMD shares have surged 151% since the beginning of the year and are up 354% over the past 12 months, making the company one of the strongest performers in the semiconductor sector.
While competition within the AI chip market continues to intensify, investors appear increasingly focused on the long-term growth opportunities tied to cloud computing, AI inference, and expanding data center investments, all areas where analysts believe AMD remains well positioned.
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