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Advanced Micro Devices (AMD) stock rose on strong Q4 data center revenue of $5.38 billion (+39% YoY) and Meta Platforms’ (META) 6GW GPU deal.
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Broadcom (AVGO) shares rose today, boosted by a long-term TPU supply deal from Google through 2031 and first-quarter AI chip revenue of $8.4 billion (+106% YoY).
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The rally in AI chips is demonstrating something important this Friday afternoon: the opportunity in artificial intelligence silicon is large enough to reward very different business models simultaneously. Advanced Microdevices (NASDAQ:AMD) shares are up 4% today, going from $236.64 to $246, while Broadcom (NASDAQ:AVGO) shares are up 5%, rising from $354.91 to $373.
What makes this rally worth paying attention to is that AMD and Broadcom are not winning for the same reason. It competes head-on with Nvidia (NASDAQ:NVDA) shares across the server GPU and CPU market. The other makes custom chips for hyperscalers who don’t want commercial silicon. Together, they illustrate that AI development is not a winner-take-all story.
So let’s look at what drives each name and what it means for investors watching the sector.
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AMD’s decision today reflects sustained momentum in its two main AI growth drivers: the EPYC server CPU franchise and the Instinct GPU line. AMD’s Instinct series of GPUs compete directly with NVIDIA in the AI ​​training and inference market, and AMD’s EPYC server CPUs are gaining significant market share in data center deployments.
The analyst community supports that thesis with real numbers. UBS has a $310 price target on AMD shares, reflecting strong confidence in the company’s growth trajectory amid growing demand for AI. That target sits well above the current trading price, giving the stock significant upside if the AI ​​infrastructure cycle accelerates.
Hyperscaler validation has arrived in a big way. Metaplatforms (NASDAQ:META) stock has a major multi-year deal on AMD GPUs, a 6 gigawatt deal, which is one of the clearest signs that hyperscalers are actively diversifying away from relying exclusively on NVIDIA.
AMD’s most recent quarterly results reinforce the growth story. In the fourth quarter of 2025, the company reported revenue of $10.27 billion, up 34% year-over-year, beating estimates of $9.72 billion. The data center segment hit a record $5.38 billion in revenue, up 39% year over year, and free cash flow hit a record $2.08 billion. CEO Lisa Su captured the momentum, saying, “We are entering 2026 with strong momentum across our business, led by accelerated adoption of our high-performance EPYC and Ryzen CPUs and rapid scaling of our data center AI franchise.”
That said, the bear case deserves recognition. US controls on MI308 GPU exports to China remain a real hurdle, and valuation concerns are real given the stock’s strong run. The stock is volatile and investors should size positions accordingly.
Broadcom’s rally tells a structurally different story. Instead of competing in the commodity GPU market, Broadcom partners with hyperscalers to design purpose-built AI chips, called ASICs, tuned for specific workloads. Broadcom’s custom ASIC chips are more power efficient and cost-effective for specific workloads than general-purpose GPUs, and that efficiency advantage is becoming increasingly attractive as hyperscalers scale their AI infrastructure.
The partnership news driving sentiment this week is significant. Broadcom entered into a long-term TPU and network supply agreement with Google through 2031, and the company is also expanding its collaboration with Anthropic. Broadcom’s network chips for Ethernet switching are also critical AI data center infrastructure, adding a second growth vector beyond custom silicon.
In the first quarter of fiscal 2026, Broadcom reported revenue of $19.31 billion, up 30% year over year, and AI chip revenue hit $8.40 billion, up 106% year over year, above the company’s own forecast. CEO Hock Tan set an ambitious target: “Our AI revenue growth is accelerating and we expect AI semiconductor revenue to reach $10.7 billion in the second quarter.” The company also announced a new $10 billion share buyback program through December 31, 2026.
Hedge funds have taken notice and piled into Broadcom shares as ASIC’s bespoke thesis gains credibility. The semiconductor industry is projected to reach a market size of $2 trillion within four years, and Broadcom’s hyperscale relationships position it to capture a disproportionate share of that growth.
AMD and Broadcom shares are rallying together today, but they are not the same trade. AMD is a broader, upper-beta play on demand for AI chips in training, inference and server computing. In contrast, Broadcom is a more focused bet on hyperscalers’ shift toward custom silicon and the network infrastructure that ties it all together. Both approaches are working right now and the market is rewarding them.
Watch to see if today’s gains hold through the close. With both stocks seeing strong momentum and AI infrastructure spending showing no signs of slowing, the sector’s tailwind appears durable. The next catalyst to watch for AMD is any updates on MI-series GPU shipment volumes; for Broadcom, it’s the fiscal 2026 second-quarter earnings report and whether AI semiconductor revenue meets guidance of $10.7 billion.
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