What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) jumped 3.9% in the morning session after a strong outlook from software giant Oracle (ORCL) fueled optimism for companies exposed to artificial intelligence demand.
Oracle's shares soared after the company boosted its outlook, citing booming AI demand. This positive sentiment rippled across the semiconductor industry, lifting shares of AI chipmakers like AMD, Nvidia, and Broadcom. The move is also supported by broader strength in the sector, as recent data showed global semiconductor sales hit $62.1 billion in July 2025, a 20.6% year-over-year increase. This growth has been fueled by high demand for data center chips and memory products, reinforcing investor confidence in the industry's prospects.
After the initial pop the shares cooled down to $161.65, up 3.7% from previous close.
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What Is The Market Telling Us
AMD’s shares are very volatile and have had 23 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 5 days ago when the stock dropped 5.3% on the news that the company was downgraded by Seaport Research due to concerns about slowing growth in its artificial intelligence (AI) business. The investment firm lowered its rating on the chipmaker to Neutral from Buy, with no price target, based on recent supply chain checks. These checks suggested slowing growth and difficulty in expanding orders for its AI accelerator business.
Adding to the negative sentiment, New Street also adjusted its price target on AMD, cutting it to $150 from $230. Broader market pressures also weighed on the stock, as the U.S. administration announced it would impose tariffs on semiconductor imports from companies not shifting production to the U.S., creating further uncertainty for the industry.
Separately, rival Broadcom confirmed a significant partnership with OpenAI (speculated), fueling concerns about intensifying competition in the artificial intelligence hardware market. Broadcom announced a $10 billion custom chip deal with OpenAI, a move that highlights a broader trend of major tech companies developing their own processors to cut costs and fine-tune AI performance. This strategy is also being pursued by Alphabet, Amazon, and Meta Platforms.
AMD is up 34% since the beginning of the year, but at $161.65 per share, it is still trading 12.3% below 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 $2,047.
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