The market value of US-based chip manufacturer Advanced Micro Devices (AMD) has crossed the $1 trillion threshold for the first time as investor expectations regarding the company's role in artificial intelligence computing have strengthened.
AMD shares rose 9.6% in late trading on Monday to reach $613.31, hitting a record high. This surge was interpreted as a reflection of market pricing, as the company is seen as one of Nvidia's most significant competitors in the field of artificial intelligence chips.
The company became the fourth US chip manufacturer to exceed a market value of $1 trillion, following Nvidia, Broadcom, and Micron. Nvidia crossed this threshold in 2023; today, the company stands as the world's most valuable firm with a market capitalization exceeding $5 trillion.
Thomas Hayes, Chairman of New York-based Great Hill Capital LLC, commented on the market activity, stating, "Money is shifting back into AI-focused investments." Hayes noted that investors view artificial intelligence as one of the areas capable of sustaining growth despite the risks of an economic slowdown, adding, "AMD is an indicator of this."
In recent months, expectations regarding AI spending by major technology companies had caused fluctuations in interest toward chip manufacturers. The rise in oil prices and expectations that interest rates could remain high for an extended period had also put pressure on the sector.
Nevertheless, a generally strong picture was observed in chip stocks on Monday. Shares of AMD's rival Intel gained approximately 11.8%, while Qualcomm shares rose 4.5%. The broad-based chip index also climbed 2.7%, reaching its highest level in the last month.
News Source: 12punto
