Updated version 1 - With its stock price boosted by AI-driven demand for chipmakers, AMD joins the “trillion-dollar club”

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Reuters, September 21 - Advanced Micro Devices (AMD.O) briefly topped a $1 trillion market capitalization for the first time on Monday, joining a select group of chipmakers to reach this milestone, as investors bet on the company’s growing role in artificial intelligence computing.

The company’s latest share price was $610, up 9%, after previously soaring to a record high of $613.92—giving it a market value just over $1 trillion.

This milestone marks a staggering rally in the stock price of California-based AMD, seen as the closest rival to AI bellwether Nvidia NVDA.O in the graphics processing unit sector.

AMD thus becomes the fourth U.S. chipmaker to cross the $1 trillion market cap threshold, after Nvidia, Broadcom AVGO.O, and Micron MU.O. Nvidia hit this mark in 2023 and has since become the world’s most valuable company, worth over $5 trillion.

AMD has stepped up the pace of its AI product launches and shifted from simply selling individual chips to offering complete systems that integrate processors, networking devices, and related hardware, helping it compete with Nvidia’s offerings.

The company has also benefited from growing demand for central processing units (CPUs) to work alongside graphics processing units (GPUs) for inference workloads in servers. This has helped AMD win market share from Intel (INTC.O).

At the start of last month, AMD’s forecast for quarterly revenue exceeded Wall Street expectations but still fell short of investors’ lofty hopes, causing its stock to drop more than 7% in a day. Since then, its share price has surged more than 26%.

On Monday, most chip stocks surged, with Intel INTC.O up about 11%, Qualcomm QCOM.O up 4.1%, and the broader chip index .SOX rising 2.6% to a one-month high.

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