AMD joins $1 trillion club as chipmakers rally on AI-driven demand

Advanced Micro Devices soared past $1 trillion in market capitalization for the first time on Monday, joining ‌a small group of chipmakers to reach the milestone, as investors bet on its expanding role in AI computing. AMD shares were last up 9.6% at $613.31, scaling a record high. The milestone caps a stellar rally for the Santa Clara, California-based company, regarded as ‌the closest rival to AI bellwether Nvidia for graphics processing units.

It becomes only the fourth US chipmaker to top ‌a $1 trillion valuation, after Nvidia, Broadcom and Micron. Nvidia crossed the mark in 2023 and is now the world's most valuable company, worth more than $5 trillion. "Money is moving back into the AI trade," said Thomas Hayes, chairman at Great Hill Capital LLC in New York.

Enthusiasm for chipmakers cooled in ⁠recent months ​as markets scrutinized AI spending by ⁠hyperscalers. Higher oil prices linked to the US-Iran conflict and expectations of higher-for-longer interest rates added to the pressure. But now investors believe AI is ⁠the only area that can work in a Federal Reserve-induced economic slowdown, Hayes said. "AMD is representative of that."

Most chip stocks surged on Monday, ​with AMD-rival Intel jumping around 11.8% and Qualcomm rising 4.5%. The broader chips index gained 2.7% to an over ⁠one-month high. BEYOND CHIPS

AMD has accelerated AI product launches and moved beyond selling individual chips to offering complete systems — combining processors, networking gear and related hardware — to compete ⁠with ​Nvidia. Growing demand for central processing units used alongside graphics processors in servers handling inference, on the other hand, has helped it take market share from Intel.

AMD forecast quarterly revenue above Wall Street estimates last month, yet fell short of ⁠lofty investor expectations. The stock's 185% surge in 2026, however, has far outpaced the 15.8% gain in the tech-heavy Nasdaq and ⁠placed it among the top S&P ⁠500 performers.

AMD last traded at around 41 times its 12-month forward earnings — below its 10-year average of 44 but much higher than Nvidia's recent trades at 16.3 times forward earnings.