Shares of Advanced Micro Devices rose 1.6% to $211.88 in early trading Monday, spearheading a rebound across the semiconductor sector following a volatile period for artificial intelligence-related stocks. The VanEck Semiconductor ETF gained 0.8%, with Nvidia climbing 3.4% and Broadcom adding 2.7%. Intel, however, declined 4.2%.
Economic Data in Focus
Investors are turning their attention to key macroeconomic indicators after a stretch of sector-specific turbulence driven by concerns over AI valuations. Remarks from Federal Reserve officials, including Governors Christopher Waller and Stephen Miran and Atlanta Fed President Raphael Bostic, are being scrutinized for hints on the interest rate path. The market's next major tests are the January Employment Situation report on Wednesday and the Consumer Price Index inflation data on Friday, both of which could significantly alter expectations for monetary policy and impact high-growth technology names.
AI Demand Underpins Sector
The chip sector's Friday surge was fueled by persistent expectations that major cloud providers will continue substantial investments in AI data center infrastructure. "There's real demand for AI products," noted Ross Mayfield, investment strategy analyst at Baird, suggesting market pullbacks often attract new buyers. The Semiconductor Industry Association forecasts global chip sales will hit $1 trillion this year, bolstered by the AI expansion.
AMD's recent quarterly forecast received a mixed reception, with some analysts questioning the pace of its competition with Nvidia in the AI accelerator market. Bernstein's Stacy Rasgon described the results as largely "inline," excluding a boost from resumed AI chip shipments to China. CEO Lisa Su highlighted 2025 as a "defining year" with record revenue, while CFO Jean Hu pointed to "profitable growth at scale."
Despite the optimistic backdrop, supply chain challenges persist. Reuters reported that Intel and AMD have warned Chinese customers of potential server CPU shortages, citing longer delivery times and tight capacity in certain segments.
The key question for markets is whether Monday's rally can be sustained as trading catalysts pivot from company-specific AI narratives to broader economic fundamentals.
