AMD Joins $1 Trillion Market Cap Club Amid Muse AI Frenzy
As users flock to Meta's artificial intelligence service 'Muse AI,' semiconductor stocks surged, with AMD, the US chipmaker at the center of the rally, surpassing $1 trillion in market capitalization for the first time in its history. By index, the Nasdaq Composite rose more than 1.5%, while the S&P 500 gained 0.9% and the Dow Jones Industrial Average climbed 0.4%. The 10-year US Treasury yield fell 3 basis points to 4.957%, and the 30-year yield dropped more than 2 basis points to 5.298%.
Among CPU stocks, AMD rose more than 9%, with Intel also up over 9% and Arm's ADRs soaring 12%, while Nvidia and Qualcomm also gained. Micron, however, rose a mere 2%, while SK Hynix's ADRs slipped 0.3%.
Behind the rally was the expectation that the rapid spread of AI agents would trigger a surge in chip demand, as Meta's Muse AI was ranked the most-downloaded free application on US iPhones over the past three days. Autonomously operating AI agents require massive amounts of CPU power to run inference models. Intel CEO Lip-Bu Tan said last week that the company is able to supply only about 50% of customer demand. Arm forecast that the server CPU market will grow more than 35% annually to reach $120 billion by 2030, while AMD projected it could generate $220 billion in revenue over the same period with 50% growth.
Strategists at Bespoke Investment Group noted, "The true drivers behind today's stock gains are nothing more than falling oil prices and declining Treasury yields." Amid the risk-on mood, Bitcoin jumped 5.3% to surpass $85,360 for the first time this year, while Ethereum rose 3.6% to $2,729.16.
Meanwhile, Brent crude futures, the international benchmark, traded 3.9% lower at $99.78 per barrel, while West Texas Intermediate (WTI) futures fell 4.9% to $95.36. Behind the decline in oil prices were developments in the Middle East. Over the weekend, Iran-backed Houthi rebels attacked Saudi Arabia with missiles and drones, and the US government warned Americans to reconsider travel to the Middle East.
President Trump said he is likely open to a meeting with Iranian President Masoud Pezeshkian during this week's UN General Assembly.
