Shares of AMD rose as much as 6 percent in premarket trading Wednesday after the chipmaker reported third-quarter results that beat Wall Street's expectations, with the company's data center sales nearly doubling from a year earlier. The results extended a jump of about 5 percent the stock had already logged after Tuesday's closing bell when the earnings were first released.
The strong report underscores how central artificial intelligence infrastructure spending has become to the technology sector's growth over the past two years, as cloud providers and AI developers continue to build out large-scale data centers that require advanced chips for training and running AI models. AMD has positioned itself as a leading alternative to Nvidia in supplying processors for that buildout.
Even so, not every chip stock moved the same direction Wednesday morning. Shares of Nvidia and Micron fell more than 1 percent as investors weighed a different kind of risk: the prospect that newly elected officials and new ballot measures could place additional restrictions on data center construction, a trend that has drawn growing local opposition in some communities over its effects on electricity prices and water use. Markets were, in effect, pricing in both a strong demand picture for AI chips and new uncertainty about where future data centers can be built.
The divergence between AMD's rally and the dip in some of its peers illustrates how company-specific news can outweigh sector-wide sentiment on any given trading day, even as investors continue to treat data center and AI infrastructure spending as one of the most important storylines for technology earnings this cycle.
Watch for commentary from other major chipmakers and cloud providers in the coming weeks on how they view the political landscape around data center construction following Tuesday's elections.
Why did AMD's stock rise?
The company reported third-quarter results that beat Wall Street's expectations, driven by data center sales that nearly doubled from a year earlier.
Why did Nvidia and Micron fall even as AMD rose?
Investors were weighing the prospect that newly elected officials and ballot measures could add new restrictions on data center construction.