Advanced Micro Devices shares jumped 14.9% on Wednesday, reaching an all-time high and adding over $86 billion in market value. According to CNBC TV18, the stock surge extended across global semiconductor stocks, with Intel rising 1.9% to a record high, Arm Holdings surging 10.1%, and Qualcomm gaining 1.6%. The rally reflects strong investor confidence about sustained demand for AI infrastructure, with the Philadelphia SE Semiconductor index advancing 2.7% to hit a fresh record high. As per CNBC TV18, chipmakers in the S&P 500 semiconductor index are expected to record robust 109.8% earnings growth for the first quarter, the highest among sub-sectors under the broader S&P 500 information technology sector.
AMD reported first-quarter sales of $10.3 billion, representing a sharp increase from $7.44 billion a year ago, as reported by LiveMint. The company's Data Centre segment revenue reached $5.8 billion, marking a 57% year-on-year increase and 7% sequentially, driven by both EPYC server CPUs and Instinct GPU ramp. CEO Lisa Su highlighted that the company delivered an outstanding quarter driven by accelerating demand for AI infrastructure, with data centres now the primary driver of revenue and earnings growth. The strong performance was primarily attributed to renewed demand for AMD's central processing units (CPUs), which are increasingly being deployed in systems used to run AI software. According to CNBC TV18, central processing units have taken center stage as companies gravitate towards agentic AI systems that perform autonomous functions, broadening demand beyond graphics processing units.
AMD has significantly upgraded its growth projections, now expecting the server CPU addressable market to grow by more than 35% annually through 2030, up from a prior forecast of 18%. As reported by CNBC TV18, analysts and investors see AMD as a leading challenger to Nvidia's dominance in AI chips, with the company benefiting from its focus on CPUs. The company expects datacenter revenue to grow double digits sequentially and server CPUs to grow more than 70% year-over-year. 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.
According to LiveMint reports, AMD highlighted significant strategic developments with major technology players. Meta plans to deploy up to 6 gigawatts of AMD Instinct GPUs while becoming a lead customer for AMD's upcoming sixth-generation EPYC processors. Leading cloud providers including Amazon Web Services, Google Cloud, Microsoft Azure, and Tencent announced new and expanded cloud instances powered by AMD's fifth-generation EPYC processors. The four cloud-computing giants have indicated that spending on artificial intelligence is unlikely to slow, with their combined outlays now set to surpass $700 billion this year. As per CNBC TV18, the company is strengthening its data center business by expanding compute infrastructure partnerships and deepening strategic collaborations with major global technology players.
The company emphasized the significant growth potential in the data centre CPU market, with projections showing annual growth exceeding 35% and reaching over $120 billion by 2030. As reported by LiveMint, this growth is fueled by accelerating demand for AI infrastructure. According to CNBC TV18, analysts note that "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." While AMD still trails behind rival Nvidia in the graphics processing unit (GPU) market for AI data centres, investor optimism suggests the AI opportunity is large enough to support multiple players. The company's expectations have surged since the artificial intelligence boom was ignited by OpenAI's ChatGPT in 2022, with Nvidia's data centre sales exploding from about $15 billion annually to $194 billion last year.
