What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) jumped 3.6% in the afternoon session after the company announced an expanded artificial intelligence (AI) partnership and reports surfaced of a potential manufacturing deal with rival Intel.
The collaboration with enterprise AI firm Cohere involved deploying Cohere's AI models on AMD's Instinct GPU-powered infrastructure, a move aimed at competing in the enterprise and sovereign AI markets. In separate reports, it was noted that AMD was in early discussions to use Intel's foundry services for some of its chip production, which would mark a shift from its current producer, TSMC. The stock's rise was also supported by broader positive sentiment for the semiconductor sector, as strong demand for data center and AI chips lifted several major tech companies.
After the initial pop the shares cooled down to $170.47, up 3.9% from previous close.
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What Is The Market Telling Us
AMD’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 3% on the news that its key rivals, Nvidia and Intel, announced a major strategic collaboration, creating a formidable competitor in the chip space. The surprise deal saw Nvidia invest $5 billion in Intel, and the two semiconductor giants teamed up to jointly develop new chips for both AI data centers and personal computers. This partnership directly challenged AMD's position in those critical markets. The collaboration aimed to fuse Intel's x86 CPUs with Nvidia's powerful RTX graphics chiplets. This move appeared to worry investors because it threatened to weaken a key advantage AMD held. The new alliance between two of its biggest rivals presented a significant competitive threat, raising concerns about AMD's future market share.
AMD is up 41.3% since the beginning of the year, and at $170.47 per share, it is trading close to its 52-week high of $184.42 from August 2025. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,084.
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