Advanced Micro Devices led a significant rally across semiconductor stocks on Friday, with shares climbing 8.2% to close at $208.44. The surge followed announcements from major technology companies indicating plans to increase capital expenditures for artificial intelligence infrastructure.
Amazon revealed intentions to boost spending by more than 50%, primarily targeting equipment and data centers, while Alphabet had previously signaled similar expansion. This news propelled the broader chip sector upward, with Nvidia gaining 7.8%, Broadcom rising 7.1%, and the PHLX Semiconductor Index advancing 5.7%.
The rally represents a notable reversal from earlier in the week, when AMD shares declined following the company's first-quarter revenue projection of approximately $9.8 billion, down from the previous quarter's $10.27 billion. Market analysts noted that while AI demand appears robust, investors are watching for concrete evidence that data-center expansion will translate into actual chip orders.
"There's enough evidence there's real demand for AI products," commented Ross Mayfield, investment strategy analyst at Baird. The sentiment was echoed by Nvidia CEO Jensen Huang, who described AI chip demand as "through the roof."
Attention now shifts to upcoming economic indicators that could influence market direction. The delayed January U.S. jobs report arrives Wednesday, followed by consumer price index data on Friday. Both releases may impact interest rate expectations and growth stock valuations.
Additional insights into data-center demand may emerge from upcoming earnings reports, including those from Cisco and other technology firms. Market participants remain watchful for potential shifts in cloud client budgets or workload migration toward proprietary chips that could affect semiconductor companies.
