Shares of Advanced Micro Devices (AMD) surged nearly 17% in premarket trade on Wednesday, leading a broad-based rally in chip stocks after the company delivered better-than-expected first-quarter results and a robust outlook, driven by accelerating demand for artificial intelligence infrastructure.
The rally spilled over into the broader semiconductor space, with the VanEck Semiconductor ETF rising about 3%, while Intel gained over 3%. The upbeat sentiment also comes amid a broader market tailwind, supported by strong corporate earnings and easing geopolitical tensions following a continued ceasefire between the US and Iran.
Yahoo Finance reported that AMD’s growth was powered by its data centre business, which has now emerged as its largest revenue contributor. Chief Executive Lisa Su said server revenue is expected to grow more than 70% year-on-year in the current quarter, underscoring strong traction in AI workloads.
The company also highlighted its expanding partnership with Meta Platforms to scale AI computing capacity, with shipments expected to begin in the second half of the year. AMD had earlier signed a multi-billion dollar chip-supply agreement with the social media giant.
Analysts turned increasingly bullish following the results.
“While many stocks have been climbing strictly on vibes lately, the company deserves significant credit for a fundamental story that increasingly is looking real,” said Stacy Rasgon of Bernstein, who upgraded the stock. Brokerages, including Goldman Sachs and Jefferies, also raised their outlook on the company.
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AMD has also lifted its long-term projections for the CPU market, forecasting 35% annual growth and a total addressable market exceeding $120 billion by 2030 — well above its previous estimates, cementing its position as a key challenger to Nvidia in the AI chip race.
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