AMD Breaches $1 Trillion Valuation as Nvidia Falls Behind

On Monday, Advanced Micro Devices (AMD) briefly crossed the $1 trillion market capitalization threshold, reaching a high of $615.99 per share before retreating.

AMD shares were last seen at $609.65, an increase of more than 8%, giving the company a market cap of $995 billion. In the same trading session, Nvidia rose by 2.33%.

AMD Achieved a Milestone That Intel Could Not

Intel rose even more, adding 12.03% to $121.67. Arm Holdings climbed 15.47%. However, neither stock approached the $1 trillion mark. Intel's market cap stands at $639.32 billion, while Arm's is $339.93 billion.

Three Factors That Kept Nvidia on the Sidelines

The first reason centers on investor buying patterns. Muse, Meta's consumer AI agent, hit the top spot in Apple's US App Store. Market participants interpreted that success as evidence that inference tasks, which involve real-time user requests, will require many more central processing units (CPUs) to operate alongside graphics chips. Last week at the Splunk conference in Denver, Intel CEO Lip-Bu Tan discussed the resulting supply crunch.

"CPU demand is so high that we can only supply 50% of customers," said Lip-Bu Tan, chief executive at Intel.

Since Nvidia's primary business is graphics processors, capital flowing toward CPU producers bypassed the company.

The second reason is specific to AMD. According to TrendForce's September 18 report, AMD notified clients of price hikes close to 10% on AI accelerators, graphics chips, and motherboard chipsets starting in the fourth quarter, reflecting increased costs from Taiwan's TSMC. Ryzen desktop CPUs were not included in the list. This move boosts AMD's margins exclusively.

The third reason involves scale, which has a double-edged effect. Nvidia also advanced. With a market cap of $5.49 trillion, its 2.33% gain represented an added value of roughly $128 billion in one day—more than one-third of Arm's total valuation. At that magnitude, being sidelined appears different. When measured in percentage terms, the way Monday's session was evaluated, the move was barely noticeable.

BeInCrypto noted this shift in capital on September 10, when Intel and AMD both emerged from multi-month downtrends as Nvidia gained 2.12%. That day, AMD finished at $521.10.

This price action comes amid an active debate about whether artificial intelligence expenditure has reached its apex. Earlier in September, chip stocks declined following Anthropic CEO Dario Amodei's caution about a slowdown.

The upcoming fourth-quarter earnings will reveal whether the price hikes affect the income statement, or if Monday's session captured demand that has yet to materialize.