AMD Reaches $1 Trillion Market Cap Milestone While NVIDIA (NVDA) Pauses

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U.S. semiconductor company AMD reached a market capitalization of $1 trillion during intraday trading for the first time in history. While buying interest concentrated on central processing unit (CPU) manufacturers due to a surge in demand for artificial intelligence (AI) inference, NVIDIA (NVDA), a leader in graphics processing units (GPUs), experienced a relatively modest rise.

According to Beincrypto on September 21 (local time), AMD's stock price surged over 8% during intraday trading, hitting $615.99 and breaking past the $1 trillion market cap. Although profit-taking later led to a close at $609.65, the company maintained a market cap of $995 billion. On the same day, Intel (INTC) rose 12.03% to $121.67, and Arm Holdings (ARM) soared 15.47%, indicating a broad buying spree in CPU-related stocks. In contrast, NVIDIA's stock price only increased by 2.33%.

The first reason for this rotation is the surging demand for CPUs due to the expansion of AI inference workloads. When Meta Platforms' (META) consumer AI agent Muse ranked first on the U.S. Apple App Store, the market re-recognized that not only GPUs but also numerous high-performance CPUs are essential for real-time inference computations. Lip-Bu Tan, Intel's CEO, recently stated at an event that CPU supply capacity is only about half of customer demand, explaining the supply-demand imbalance.

Expectations for the company's own profitability improvement were also reflected. According to market research firm TrendForce, AMD decided to increase the prices of its AI accelerators, graphics chipsets, and motherboard chipsets by approximately 10% starting in the fourth quarter, reflecting price increases from Taiwanese foundry TSMC. This product price hike is expected to independently boost AMD's profit margin.

NVIDIA's relative sluggishness is attributed to its enormous market capitalization. Although NVIDIA only rose 2.33%, its market capitalization reached $5.49 trillion, meaning an increase of approximately $128 billion in market cap in a single day. This is more than one-third of the entire enterprise value of Arm Holdings, which has a market cap of $339.93 billion. While the percentage return might seem stagnant, the absolute amount of capital inflow was still massive.

Demand for AI semiconductors is diversifying beyond GPUs for training to the CPU ecosystem for real-time inference. Wall Street's attention is focused on whether AMD, having set a historic milestone, can successfully settle at the $1 trillion mark by leveraging supply shortages and price increases.

[Article Key Summary]

-AMD's stock price surged to $615.99, breaking the $1 trillion market capitalization for the first time in history.

-The expansion of AI inference demand has led to a CPU shortage, and a 10% product price increase in Q4 is expected to boost margins.

-NVIDIA only rose 2.33%, but based on its $5.49 trillion market cap, it added $128 billion in a day, demonstrating its robust size.

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