Advanced Micro Devices (AMD) shares hit a new all-time high, up more than 215% year-over-year. In the session the stock rose about 2.6% to roughly $648, climbing close to $650 a share.
Demand and price targets
CEO Lisa Su gave a bullish message on AI demand, saying chip demand should stay very high for years. Demand keeps outpacing supply despite efforts to ramp production, and the company plans large capacity increases in 2027.
Wall Street turned more positive. Citigroup (C) raised its price target to $800 from $575. Mizuho (MFG) lifted its target to $705 from $580. Both firms point to fast adoption of AI agents, including Meta's (META) Muse, as a big new driver of compute demand. Agentic AI applications could need far more processing power than traditional chatbots, and AMD is seen as a key winner through its CPU business. The next wave of AI infrastructure spending could be another lift for the stock.
Mizuho also raised targets on other names tied to the same agentic AI trend after Meta's Muse launch: Dell (DELL) to $650, Intel (INTC) to $114, SanDisk (SNDK) to $2,050, and Super Micro (SMCI) to $43. The theme centers on rising CPU demand.
Trading view
The stock broke out to a fresh all-time high, but the upside moves are getting less strong, and the pop this session was smaller than most bulls hoped for. The stock looks due for at least a cool-down in the rally.
One example options trade: sell the November 750/760 out-of-the-money call spread for about $2, giving a return on risk of almost 25% and more than 100 points of upside cushion through earnings. This takes advantage of high implied volatility (IV) heading into earnings. Recent earnings reactions in chips have been poor - SanDisk (SNDK) and Micron (MU) show this. The AI upswing may start to cool. The chip sector will benefit for years, but current stock prices more than reflect that, based on today's price action.
Broader market
The S&P 500 broke out to fresh all-time highs, with the Nasdaq doing so earlier. The Russell, the smaller-cap laggard, now looks more appealing because the long end of the yield curve may be getting some pushback, which helps the Russell most. Favoring the Russell over the S&P and Nasdaq makes sense given the big outperformance already seen in large caps. One approach: play relative moves, buy the underperformers, sell the outperformers, and expect a go-nowhere market after the broad rally to new highs.
Strength was broad-based across sectors. The only sector in the red was healthcare, with Moderna (MRNA) among the names lagging on the S&P.
