Chipmaker Stocks Surge Amid AI Architecture Shift
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 14 2026
0mins
Source: CNBC
- Surge in Chip Stocks: Over the past month, Micron's stock has surged by 80%, SanDisk by 52%, and Intel by 85%, reflecting strong market confidence in chip demand, particularly in the expanding AI sector.
- Demand Driven by Architectural Shift: As AI system architecture evolves towards 'orchestration', the demand for traditional central processing units (CPUs) is increasing relative to graphics processing units (GPUs), with Morgan Stanley analysts noting that this shift will redirect infrastructure spending towards CPUs, networking, and memory, while GPU demand remains significant.
- Meta and AMD Partnership: Meta announced a $60 billion deal with AMD to purchase six gigawatts of chips over five years, allowing Meta to acquire up to 10% of AMD, highlighting the strategic importance of CPUs in the AI compute stack.
- Impact on Cybersecurity: The launch of Anthropic's Mythos sent shockwaves through the cybersecurity sector, with research organizations successfully reproducing its results using orchestrated lower-tier public models, indicating a reevaluation of CPU effectiveness and cost-efficiency in AI computing.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to fall
33 Analyst Rating
25 Buy
8 Hold
0 Sell
Strong Buy
Current: 518.090
Low
210.00
Averages
289.13
High
377.00
Current: 518.090
Low
210.00
Averages
289.13
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing and artificial intelligence (AI). Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes AI accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Arm Holdings' Rise in Data Center CPU Market
- Market Share Growth: Arm Holdings has captured approximately 50% of the data center CPU market, bolstered by the widespread adoption of its efficient Arm architecture by top hyperscalers like Nvidia and Amazon, indicating a significant shift in competitive dynamics.
- Revenue Growth Outlook: Arm anticipates that its direct chip sales will reach $15 billion by 2031, potentially generating $7.5 billion in gross profit, showcasing a remarkable growth trajectory compared to its gross profit of $4.8 billion in 2025, reflecting strong future demand.
- Surging CPU Demand: As agentic AI workloads increase, the CPU-to-GPU ratio may shift from 1:4 to 1:1, highlighting the value of Arm's designs in meeting this demand, which further enhances its market position.
- Valuation Concerns: Despite Arm's stock tripling in value since the beginning of the year, its current P/E ratio stands at 159, prompting investors to carefully evaluate whether this high valuation is justified, especially given the disparity between the company's growth potential and market expectations.
See More
Tech Stocks Drive Market Rally Amid Uneven Economy
- Tech Stock Surge: Since March 30, Micron, Intel, and AMD have surged 201%, 178%, and 163% respectively, vastly outperforming the S&P 500's 19.5% gain, highlighting the dominance of tech stocks in the current market rally.
- Market Structure Shift: Technology now constitutes 35% of the S&P 500, while other sectors lag behind, indicating that the rally is heavily reliant on a few stocks, which increases market vulnerability.
- Declining Economic Confidence: Despite the stock market's rise, manufacturing activity remains uneven, consumer confidence has plummeted, and spending has slowed in several categories, suggesting that the overall economic health is not improving in tandem with the market.
- Historical Context Comparison: The S&P 500 has recorded 10 previous nine-week winning streaks since 1945, but the current rally is primarily driven by tech stocks, lacking broad industry participation, which could impact future market stability.
See More
Nvidia's Stock Potential Soars, Expected to Exceed $400
- Significant Earnings Growth: Nvidia's revenue for Q1 FY2027 surged 85% year-over-year to $81.6 billion, showcasing its robust performance in the rapidly growing AI chip market, which is expected to further drive stock price increases.
- Strong Earnings Expectations: Analysts anticipate Nvidia's earnings per share will soar by 87% to $8.94 this year, significantly outpacing the S&P 500's expected growth of 22%, indicating strong market confidence in its future profitability.
- Leading Market Share: Nvidia commands an 80%-90% share of the AI accelerator market and plans to expand its influence by launching standalone server processors, which are projected to generate $20 billion in revenue this year.
- Emerging Market Opportunities: Nvidia's revenue from the physical AI market exceeded $9 billion over the past four quarters, demonstrating rapid growth potential in this emerging field, with expectations of generating $200 billion in revenue opportunities over the next decade.
See More
Nvidia's Earnings Surge Indicates Undervaluation Amid AI Expansion
- Significant Earnings Growth: Nvidia's revenue for Q1 FY2027 surged 85% year-over-year to $81.6 billion, showcasing its robust performance in the rapidly growing AI market, far exceeding the S&P 500's expected growth of 13%.
- Strong Profit Outlook: The company anticipates revenue of $91 billion for the current quarter, representing a 95% year-over-year increase, with a projected non-GAAP gross margin of 75%, indicating sustained improvement in profitability.
- Expanding Market Share: Nvidia commands an 80%-90% share of the AI accelerator market and plans to further penetrate this space by offering standalone server processors, expecting $20 billion in revenue from this product this year.
- Emerging Market Opportunities: Nvidia generated over $9 billion in revenue from the physical AI market over the past four quarters, a 50% increase from $6 billion in FY2026, highlighting its rapid growth potential in new markets, with expectations of reaching $200 billion in revenue over the next decade.
See More
Micron Technology Stock Overbought, Market Cap Surpasses $1 Trillion for First Time
- Micron Stock Surge: Driven by insatiable demand for memory chips in AI applications, Micron's stock soared 29% this week, marking its market capitalization surpassing $1 trillion for the first time, reflecting strong market confidence in its future growth prospects.
- UBS Price Target Increase: UBS raised Micron's price target to $1,625, implying a 67% upside from Friday's close, as analysts believe the market will assign a more 'normal' valuation multiple as AI drives structural changes in the memory sector.
- Dell's Impressive Performance: Dell Technologies saw a 33% stock increase this week, achieving its largest single-day gain on Friday, with Q1 revenue of $43.84 billion exceeding analyst expectations of $35.43 billion and a year-over-year growth rate of nearly 88%, showcasing its strong position in the AI data center market.
- Ford's Investor Optimism: Ford Motor's stock rose 17% this week, with an RSI of 80, as analysts noted that optimism surrounding its battery energy storage system has boosted investor sentiment, leading to a price target increase from $17 to $20, indicating a further 15% upside potential.
See More
TSMC's Dominance in the Semiconductor Market
- Market Leadership: TSMC has achieved a near-monopoly in the semiconductor industry through its advanced chip manufacturing technology and scale, relying on all logic chip designers, ensuring the company continues to benefit amid growing demand for AI accelerators and CPUs.
- Significant Investment Returns: Glen Kacher, founder of Light Street Capital, has demonstrated outstanding performance over the past three years, with his fund generating returns of 45.7%, 59.4%, and 37.3% in 2023, 2024, and 2025 respectively, showcasing the success of his investment strategy in the semiconductor sector.
- Custom Chip Market Potential: Broadcom shows immense growth potential in its custom AI chip business, with projected revenues exceeding $100 billion by fiscal 2027, while analysts forecast AI revenues to reach $180 billion by fiscal 2028, reflecting strong demand in the data center market.
- AMD's Growth Opportunities: AMD is poised to capitalize on the growth of agentic AI and inference markets through its chip design, with two contracts worth approximately $100 billion each, further solidifying its leadership in the data center CPU market and showcasing robust growth prospects.
See More
Arm Holdings' Rise in Data Center CPU Market
- Market Share Growth: Arm Holdings has captured approximately 50% of the data center CPU market, bolstered by the widespread adoption of its efficient Arm architecture by top hyperscalers like Nvidia and Amazon, indicating a significant shift in competitive dynamics.
- Revenue Growth Outlook: Arm anticipates that its direct chip sales will reach $15 billion by 2031, potentially generating $7.5 billion in gross profit, showcasing a remarkable growth trajectory compared to its gross profit of $4.8 billion in 2025, reflecting strong future demand.
- Surging CPU Demand: As agentic AI workloads increase, the CPU-to-GPU ratio may shift from 1:4 to 1:1, highlighting the value of Arm's designs in meeting this demand, which further enhances its market position.
- Valuation Concerns: Despite Arm's stock tripling in value since the beginning of the year, its current P/E ratio stands at 159, prompting investors to carefully evaluate whether this high valuation is justified, especially given the disparity between the company's growth potential and market expectations.
See More
Tech Stocks Drive Market Rally Amid Uneven Economy
- Tech Stock Surge: Since March 30, Micron, Intel, and AMD have surged 201%, 178%, and 163% respectively, vastly outperforming the S&P 500's 19.5% gain, highlighting the dominance of tech stocks in the current market rally.
- Market Structure Shift: Technology now constitutes 35% of the S&P 500, while other sectors lag behind, indicating that the rally is heavily reliant on a few stocks, which increases market vulnerability.
- Declining Economic Confidence: Despite the stock market's rise, manufacturing activity remains uneven, consumer confidence has plummeted, and spending has slowed in several categories, suggesting that the overall economic health is not improving in tandem with the market.
- Historical Context Comparison: The S&P 500 has recorded 10 previous nine-week winning streaks since 1945, but the current rally is primarily driven by tech stocks, lacking broad industry participation, which could impact future market stability.
See More
Nvidia's Stock Potential Soars, Expected to Exceed $400
- Significant Earnings Growth: Nvidia's revenue for Q1 FY2027 surged 85% year-over-year to $81.6 billion, showcasing its robust performance in the rapidly growing AI chip market, which is expected to further drive stock price increases.
- Strong Earnings Expectations: Analysts anticipate Nvidia's earnings per share will soar by 87% to $8.94 this year, significantly outpacing the S&P 500's expected growth of 22%, indicating strong market confidence in its future profitability.
- Leading Market Share: Nvidia commands an 80%-90% share of the AI accelerator market and plans to expand its influence by launching standalone server processors, which are projected to generate $20 billion in revenue this year.
- Emerging Market Opportunities: Nvidia's revenue from the physical AI market exceeded $9 billion over the past four quarters, demonstrating rapid growth potential in this emerging field, with expectations of generating $200 billion in revenue opportunities over the next decade.
See More
Nvidia's Earnings Surge Indicates Undervaluation Amid AI Expansion
- Significant Earnings Growth: Nvidia's revenue for Q1 FY2027 surged 85% year-over-year to $81.6 billion, showcasing its robust performance in the rapidly growing AI market, far exceeding the S&P 500's expected growth of 13%.
- Strong Profit Outlook: The company anticipates revenue of $91 billion for the current quarter, representing a 95% year-over-year increase, with a projected non-GAAP gross margin of 75%, indicating sustained improvement in profitability.
- Expanding Market Share: Nvidia commands an 80%-90% share of the AI accelerator market and plans to further penetrate this space by offering standalone server processors, expecting $20 billion in revenue from this product this year.
- Emerging Market Opportunities: Nvidia generated over $9 billion in revenue from the physical AI market over the past four quarters, a 50% increase from $6 billion in FY2026, highlighting its rapid growth potential in new markets, with expectations of reaching $200 billion in revenue over the next decade.
See More
Micron Technology Stock Overbought, Market Cap Surpasses $1 Trillion for First Time
- Micron Stock Surge: Driven by insatiable demand for memory chips in AI applications, Micron's stock soared 29% this week, marking its market capitalization surpassing $1 trillion for the first time, reflecting strong market confidence in its future growth prospects.
- UBS Price Target Increase: UBS raised Micron's price target to $1,625, implying a 67% upside from Friday's close, as analysts believe the market will assign a more 'normal' valuation multiple as AI drives structural changes in the memory sector.
- Dell's Impressive Performance: Dell Technologies saw a 33% stock increase this week, achieving its largest single-day gain on Friday, with Q1 revenue of $43.84 billion exceeding analyst expectations of $35.43 billion and a year-over-year growth rate of nearly 88%, showcasing its strong position in the AI data center market.
- Ford's Investor Optimism: Ford Motor's stock rose 17% this week, with an RSI of 80, as analysts noted that optimism surrounding its battery energy storage system has boosted investor sentiment, leading to a price target increase from $17 to $20, indicating a further 15% upside potential.
See More
TSMC's Dominance in the Semiconductor Market
- Market Leadership: TSMC has achieved a near-monopoly in the semiconductor industry through its advanced chip manufacturing technology and scale, relying on all logic chip designers, ensuring the company continues to benefit amid growing demand for AI accelerators and CPUs.
- Significant Investment Returns: Glen Kacher, founder of Light Street Capital, has demonstrated outstanding performance over the past three years, with his fund generating returns of 45.7%, 59.4%, and 37.3% in 2023, 2024, and 2025 respectively, showcasing the success of his investment strategy in the semiconductor sector.
- Custom Chip Market Potential: Broadcom shows immense growth potential in its custom AI chip business, with projected revenues exceeding $100 billion by fiscal 2027, while analysts forecast AI revenues to reach $180 billion by fiscal 2028, reflecting strong demand in the data center market.
- AMD's Growth Opportunities: AMD is poised to capitalize on the growth of agentic AI and inference markets through its chip design, with two contracts worth approximately $100 billion each, further solidifying its leadership in the data center CPU market and showcasing robust growth prospects.
See More
