Advanced Micro Devices (AMD) saw its share price climb sharply in early trading on Wednesday, extending a recent rally driven by surging demand for its artificial intelligence processors. The stock was up more than 5% in pre-market activity, crossing the $140 mark, after a series of bullish analyst notes lifted sentiment.
Analysts at Morgan Stanley and KeyBanc raised their price targets for AMD, pointing to accelerating sales of the company's MI300 series AI accelerators. These chips compete directly with Nvidia's market-leading offerings and have been gaining traction among cloud computing giants and enterprise data centres. The upgrades come ahead of AMD's next earnings report, due later this month.
The move is part of a wider upward trend in semiconductor stocks, as investors bet that AI infrastructure spending will remain robust through 2025. The Philadelphia Semiconductor Index, a benchmark for the sector, also rose more than 2% in sympathy. For UK investors with exposure to US tech through pension funds or ISAs, the rally underscores the continued dominance of AI themes in global equity markets.
However, some analysts caution that AMD still trails Nvidia in market share and software ecosystem maturity. "The MI300 is a strong product, but Nvidia's CUDA platform remains the default for developers," said one London-based tech analyst. "AMD's success depends on how quickly it can close that gap."
For UK pension holders, the gains in AMD and other AI stocks highlight the growing concentration risk in global indices. The technology sector now accounts for a significant portion of the S&P 500, meaning that any downturn in AI demand could have outsized effects on retirement savings. Diversification across sectors and regions remains a key consideration for long-term investors.
Source: Reuters, Morgan Stanley research note, KeyBanc research note