AMD's stock is red-hot - and just hit a major milestone

By Britney Nguyen

AMD joined the ranks of $500 billion companies, with its shares soaring after Intel's earnings report

AMD surpassed a $500 billion market capitalization for the first time on Friday.

Shares of Advanced Micro Devices soared on Friday, with the chip maker finishing the day with a market capitalization north of $500 billion for the first time ever.

AMD shares (AMD) were up 14% at the market close, which translates to a $567 billion market cap, according to Dow Jones Market Data. The company reached the market-cap milestone less than six years after first crossing the $100 billion mark in August 2020.

The chip maker's stock is up 71% so far in April, putting it on pace for its best month since January 2001, when it climbed 78%.

Only 17 U.S. companies were worth more than $500 billion as of Thursday's close, according to Dow Jones Market Data. One was Micron Technology (MU), which recently cleared the bar after its own explosive stock rally.

While AMD already had traction in the artificial-intelligence-chip race thanks to its graphics processing units, the company is now benefiting from extreme momentum for server central processing units. The rise of agentic AI has prompted strong demand for CPUs to run those applications, to the point that there's now a supply shortage.

Intel's (INTC) earnings report, which came out after Thursday's market close, validated the broader CPU narrative.

"We figured CPUs were the next big bottleneck, but Intel's results indicate that is already translating to very significant upside," D.A. Davidson managing director Gil Luria said.

See more: Intel's stock extends its spectacular run - and could see its best daily gain in four decades

Luria upgraded AMD's stock from neutral to buy in his Friday note, pointing to "a structural increase in CPU demand on top of much improved visibility" into how AMD will play into the AI data-center build-out.

Given Intel's significant first-quarter beat, Luria sees "meaningful upside" for AMD, starting with its earnings results that are due out on May 5.

Additionally, AMD should be able to meaningfully raise prices for its server CPUs and other offerings given the unprecedented demand, Luria said. That would offer a boost to its margins, he said, as demand will likely continue to outstrip supply in the near term.

Both AMD and Intel are "the obvious beneficiaries" of growing CPU demand, Morgan Stanley analyst Joseph Moore said. And AMD has an edge over its rival, he said, given what he deems to be superior products.

Moore expects AMD to eventually command a strong share of the market for general-purpose CPUs, and he is optimistic about its upcoming sixth-generation EPYC server processor, known as Venice.

Still, Moore said in a recent note that server CPUs have not been the primary thesis for either stock.

Given that most of the longer-term revenue targets for AMD revolve around its GPUs, Moore said he thinks investors will continue to look for signs of improvements on the GPU front. He pointed to AMD's upcoming Instinct MI455 accelerators, which will also be deployed in a series of deals between the chip maker and its hyperscaler customers.

In February, AMD said that it will support Meta Platforms (META) with up to 6 gigawatts' worth of its GPUs in a multiyear partnership that will kick off later this year. That follows a similar agreement with OpenAI that was announced in October.

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-Britney Nguyen

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04-24-26 1636ET