AMD Stock Rally Fueled by AI Chip Optimism and Strategic Partnerships

Advanced Micro Devices Inc. shares surged 6.74% on Tuesday, closing at $138.31 as the semiconductor company capitalized on bullish analyst sentiment and a new strategic partnership. The rally follows Melius Research's upgrade to 'buy' with a $175 price target, representing nearly 27% upside from current levels.

CEO Lisa Su's bold claim that upcoming MI350 and MI400 chips will outperform Nvidia's Blackwell series has reignited the AI accelerator arms race. This technological confidence was complemented by Ark Investment's $36 million stake acquisition last week, signaling institutional belief in AMD's competitive positioning.

The HCLTech collaboration establishes innovation labs targeting AI and cloud solutions, positioning AMD to capture growth in India's burgeoning tech sector. Market-wide tailwinds from geopolitical de-escalation and anticipated Fed easing further buoyed semiconductor stocks.