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

Reports coming in for today mention that 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 market participants 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 surge for the Santa Clara, California-based firm, 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 firm, worth more than $5 trillion.

"Money is moving back into the AI trade," stated 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. Elevated crude prices linked to the US-Iran conflict and expectations of elevated-for-longer interest rates further noted to the pressure.

But now market participants believe AI is the only area that can work in a The US central bank-induced economic slowdown, Hayes stated. "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 advanced 2.7% to an over one-month high.

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 topline above Wall Street estimates last month, yet declined short of lofty investor expectations.

The stock's 185% surge in 2026, that stated, 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 elevated than Nvidia's recent trades at 16.3 times forward earnings.