Advanced Micro Devices Inc (NASDAQ:AMD) shares have staged a significant rally since the start of the year amid a surge in chip stocks related to accelerated demand for AI. Chip stocks are pulling back this week following massive moves in some of the biggest names.
What Sparked The Rally: Microsoft-backed ChatGPT took the world by storm this year. It exceeded 100 million monthly active users in just two months’ time, making it the fastest-growing platform ever, and it’s not showing signs of slowing down.
AMD and Nvidia Corp (NASDAQ:NVDA) make chips that power large language models (LLMs) like ChatGPT, which created increased excitement around the stocks.
Nvidia validated that excitement last month when it reported better-than-expected financial results and issued an incredibly strong outlook, driven by outsized demand for the company’s AI chips.
The chipmaker guided for second-quarter revenue of $11 billion, plus or minus 2%, which was well above even the highest analyst forecasts. The consensus estimate for Nvidia’s top-line number next quarter was just $7.15 billion.
Despite declining nearly 6% in Wednesday’s session, AMD shares are still up nearly 75% year-to-date. The company announced plans to expand its operations in Ireland on Wednesday. AMD said it will invest up to $135 million over four years.
“Through this investment, our R&D teams in Ireland will design innovative high-performance and adaptive computing engines to accelerate data centre, networking, 6G communications and embedded solutions while taking a leadership position on artificial intelligence,” said Ruth Cotter, senior vice president of marketing, communications and human resources at AMD.
Check This Out: Artificial Intelligence Stocks Surge, But Do Investors Trust AI With Financial Decisions? New Poll Provides Answers
AMD Price Action: AMD shares were up 1.26% at $113.52 at the time of publication, according to Benzinga Pro.
Photo: courtesy of AMD.
