AI Stocks Rally As Shutdown Deal Renews Appetite for Risk

Advanced Micro Devices is holding its Financial Analyst Day on Tuesday. Above, AMD’s Epyc 2nd-generation chip. (David Paul Morris/Bloomberg)

Key Points

• AI stocks rebounded Monday after a government shutdown deal, with Nvidia and AMD rising by as much as 5% after last week’s declines.
• Nvidia CEO Jensen Huang met with TSMC executives, requesting increased chip wafer production.
• AMD’s CEO hinted at raising its 2028 AI data center chip forecast and expects its AI business to reach tens of billions in annual revenue by 2027.

The artificial-intelligence stock trade is back with a vengeance.

On Monday, the biggest names related to the AI trade rebounded after Congress reached a deal to end the government shutdown. AI stocks tumbled last week on worries an extended shutdown would hurt the U.S. economy. Shares of Nvidia and Advanced Micro Devices dropped 7% and fell 9%, respectively, last week.

In Monday trading, both Nvidia and AMD rose by as much as 5%. Palantir , down 11% last week, jumped 7%.

Over the weekend, Nvidia CEO Jensen Huang met with executives at Taiwan Semiconductor Manufacturing , or TSMC. TSMC Chief Executive C.C. Wei told reporters that Huang had asked for more chip wafer production.

Advanced Micro Devices’ stock move comes a day before the chip maker will present its long-term plans to Wall Street analysts. The company’s management may raise its forecast for the artificial-intelligence market.

On Tuesday, the chip maker will host its Financial Analyst Day in New York City starting at 1 p.m. Eastern time. AMD said its executive team will highlight its strategy and long-term financial plan.

Created with Highcharts 9.0.1Advanced Micro DevicesSource: FactSetAs of Nov. 10, 4 p.m. ET

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Last week, AMD reported better-than-expected earnings results for the September quarter and forecast current-quarter revenue above the Wall Street consensus at the midpoint.

On the call with analysts the evening of the earnings report, CEO Lisa Su said many customers are planning “substantially” larger CPU buildouts in the next few quarters to support higher AI demand. Su also hinted that she would be raising her previous $500 billion AI data center chip forecast for 2028 at AMD’s Financial Analyst Day. She said AMD’s AI business is on track to grow to tens of billions of dollars in annual revenue by 2027.

Some Wall Street commentators pointed to the Financial Analyst Day as a factor that could help AMD shares move higher. “We expect the company to provide more detail on its technology road map, customer traction and market sizing at the 2025 Analyst/Investor Day next week,” wrote Stifel analyst Ruben Roy in a research note last week.

Write to Tae Kim at tae.kim@barrons.com