Advanced Micro Devices (AMD) shares surged more than 7% in U.S. premarket trading on Friday, propelling the chipmaker's market capitalization past the $500 billion threshold for the first time. The rally followed Intel's quarterly earnings report, which highlighted robust demand for central processing units (CPUs) powering artificial intelligence workloads in data centers, a shift that investors believe will benefit AMD's entrenched EPYC server processor lineup.
Intel's Data Center and AI segment revenue climbed 22% year-over-year to $5.1 billion in the first quarter, driven by strong appetite for server chips supporting AI systems. Intel CEO Lip-Bu Tan noted during the earnings call that demand continues to outpace supply, a dynamic he expects to persist through 2026 and 2027. This commentary sent ripples across the semiconductor sector, lifting shares of AMD and Arm Holdings as well.
While graphics processing units (GPUs) from Nvidia remain the dominant choice for training large AI models, CPUs are increasingly critical for inference—the process of running trained models to answer queries—and for coordinating AI workloads in large server clusters. AMD's EPYC CPUs are already well-positioned in this space, and the company also offers its own Instinct line of AI accelerators, giving it a dual foothold in the AI infrastructure market.
AMD closed Thursday at $305.33, with a market cap of approximately $497.79 billion. Premarket trading on Friday suggested the stock would open above $341, pushing the valuation above $500 billion. The milestone underscores the market's growing confidence in AMD's ability to capitalize on the AI-driven demand for both CPUs and accelerators.
Intel reported first-quarter revenue of $13.6 billion, up 7% from the prior year, and guided for second-quarter revenue between $13.8 billion and $14.8 billion. The strong Data Center and AI performance was a key driver. Analysts characterized the moment as a “CPU Renaissance,” with Evercore ISI's Mark Lipacis and RBC Capital's Srini Pajjuri both highlighting server CPU demand running ahead of supply. Northland's Gus Richard added that the shift from training to inference and agentic AI—where systems plan and execute multi-step actions—could further boost CPU requirements.
AMD is set to report its first-quarter earnings on May 5 after the market close, with a conference call scheduled for 5 p.m. ET. The company's 2025 revenue reached a record $34.6 billion, with data-center sales in the fourth quarter hitting $5.4 billion, a 39% increase fueled by EPYC processors and growing Instinct GPU shipments. CEO Lisa Su cited strong momentum across EPYC, Ryzen, and the data-center AI business heading into 2026.
The stock has also been buoyed by major AI contracts. In February, AMD announced a deal to supply Meta Platforms with up to $60 billion in AI chips over five years, with an option for Meta to acquire up to 10% of AMD. However, risks remain, including export restrictions, intense competition from Nvidia and Intel, product timing issues, and supply-chain challenges. If demand for CPU-centric AI softens or rivals capture more market share, Friday's gains could quickly reverse.
For now, the market is betting that the CPU renaissance is just beginning, and AMD is poised to be a key beneficiary. Investors will be watching closely when AMD reports its quarterly results next week.
