AMD’s CFO raises the total addressable market forecast for AI chips toward $3 trillion, driving a 3% stock increase alongside Intel.
Advanced Micro Devices (NASDAQ:AMD) shares rose 3% to $521.59 in Wednesday morning trading, extending a rally that began after Chief Financial Officer Jean Hu addressed the Citi Global TMT Conference on Tuesday. Heading into the session, AMD stock had gained 144.4% year to date, driven by a Data Center segment that more than doubled year over year in the previous quarter. The shares have since broken through their 50-day moving average of $499.27.
In contrast, Intel (NASDAQ:INTC) stock edged up just 1% to $105.76, reflecting a muted response as investor focus shifted toward AMD. This movement appears company-specific rather than a broad semiconductor sector bid, particularly given AMD’s outsized gains relative to its sector fund on a day when large-cap technology stocks were slightly lower. For broader context, the iShares Semiconductor ETF (NASDAQ:SOXX) rose 0.8% to $532.50, providing a modest tailwind across chip names. Meanwhile, the Invesco QQQ Trust (NASDAQ:QQQ) dipped 0.04% to $718, underscoring how narrowly concentrated the buying interest remains around AMD.
During his Citi conference remarks, Hu significantly expanded the projected size of the AI chip market, stating the total addressable market could reach $2 trillion to $3 trillion by 2030. This upper bound exceeds AMD’s previous $2 trillion estimate and served as the primary catalyst for the stock’s surge on Tuesday afternoon. The projection also builds upon CEO Lisa Su’s August commentary, which indicated that the data center AI accelerator market alone could reach $1.4 trillion by 2030. “This AI super investment cycle is at the very beginning, and over time, we’re going to continue to see strong demand for AMD’s product,” Hu said. He added that AMD’s data center business is expected to more than double next year, noting that supply remains extremely tight across wafers, advanced packaging, and high-bandwidth memory. The company reinforced this outlook in August with an agreement for Anthropic to deploy up to 2 gigawatts of MI450 Series GPUs in AMD’s Helios racks.
Meta Platforms (NASDAQ:META) stands alongside OpenAI and Anthropic as one of AMD’s anchor AI customers. Hu noted that these partners’ forecasts exceeded AMD’s initial expectations when the partnerships were established. AMD’s Q2 2026 earnings report supports this momentum, showing Data Center revenue surging 107% year over year to $6.72 billion, which accounted for 58% of the company’s total sales.
On the manufacturing front, Hu provided clarity regarding AMD’s foundry strategy. When asked whether AMD might utilize Intel Foundry, he stated, “You should expect us to continue to view TSMC as our primary supplier on the wafer side,” and confirmed that AMD co-develops technology with Taiwan Semiconductor Manufacturing (NYSE:TSM). This alignment coincides with TSMC’s own guidance that its 2026 capital expenditure budget has increased to $60 billion–$64 billion to meet surging AI demand.
Hu’s reaffirmation of TSMC as the primary foundry partner quietly dispels market speculation that had favored Intel. Intel Foundry reported $5.76 billion in Q2 2026 revenue, a 31% year-over-year increase, though it also recorded a $2.1 billion operating loss. CEO Lip-Bu Tan continues to work on securing external logic customers at scale. Any prospective AMD wafer allocation slipping away keeps Intel’s foundry growth timeline tightly coupled to its own internal product roadmaps.
NVIDIA (NASDAQ:NVDA) remains the incumbent leader in AI accelerators and serves as the benchmark against which AMD’s expanded market forecast is measured. With NVIDIA’s most recent quarterly revenue reaching $96.22 billion, the bullish case for AMD hinges on capturing a growing share of existing customer budgets rather than displacing the market leader. This expansion also benefits a broader ecosystem of suppliers beyond the chipmakers themselves; we recently profiled seven key players spanning power delivery and thermal management in a complimentary research report.
While the sharpest price action occurred on Tuesday following Hu’s conference remarks, Wednesday’s continuation reflects follow-through buying rather than an initial reaction. Because the catalyst centers on an elevated market forecast rather than reported earnings, some investors remain cautious regarding valuation. AMD currently trades at a trailing P/E ratio of 129.02x and a forward P/E ratio of 30.67x, against an analyst consensus target price of $615.38.
Analyst sentiment has largely mirrored the stock’s upward trajectory. The consensus fiscal 2027 EPS estimate has risen to $15.4507 from $12.9595 ninety days ago, supported by 33 upward revisions compared to just three downward revisions over the past 30 days. A composite forecast sentiment score of 67.8 indicates a bullish outlook with medium confidence.
The next major catalyst will be AMD’s Q3 2026 earnings report, where management has guided to approximately $13 billion in revenue, representing a 41% year-over-year increase. Investors will likely monitor whether AMD maintains support above $520 heading into the close, while carefully calibrating position sizes given the ongoing valuation discussion.
For questions or corrections, contact [email protected].