What's Going On With AMD Stock?

Advanced Micro Devices Inc AMD shares have staged a significant rally since the start of the year amid a surge in chip stocks related to accelerated demand for AI. Chip stocks are pulling back this week following massive moves in some of the biggest names.

What Sparked The Rally: Microsoft-backed ChatGPT took the world by storm this year. It exceeded 100 million monthly active users in just two months' time, making it the fastest-growing platform ever, and it's not showing signs of slowing down.

AMD and Nvidia Corp NVDA make chips that power large language models (LLMs) like ChatGPT, which created increased excitement around the stocks. 

Nvidia validated that excitement last month when it reported better-than-expected financial results and issued an incredibly strong outlook, driven by outsized demand for the company's AI chips.

The chipmaker guided for second-quarter revenue of $11 billion, plus or minus 2%, which was well above even the highest analyst forecasts. The consensus estimate for Nvidia's top-line number next quarter was just $7.15 billion.

Despite declining nearly 6% in Wednesday's session, AMD shares are still up nearly 75% year-to-date. The company announced plans to expand its operations in Ireland on Wednesday. AMD said it will invest up to $135 million over four years. 

"Through this investment, our R&D teams in Ireland will design innovative high-performance and adaptive computing engines to accelerate data centre, networking, 6G communications and embedded solutions while taking a leadership position on artificial intelligence," said Ruth Cotter, senior vice president of marketing, communications and human resources at AMD.

Check This Out: Artificial Intelligence Stocks Surge, But Do Investors Trust AI With Financial Decisions? New Poll Provides Answers

AMD Price Action: AMD shares were up 1.26% at $113.52 at the time of publication, according to Benzinga Pro.

Photo: courtesy of AMD.