**AMD Shares Surge 10% Amid Strong AI Investment Confidence**
AMD shares jumped 10% on Wednesday, shrugging off weakness across tech stocks. The rally followed comments from CEO Lisa Su, who emphasized that companies investing billions in computing infrastructure are not wasting money but accelerating progress.
When asked about Big Tech’s aggressive AI investment pace, Lisa Su said, “I don’t think it’s a big gamble. I think it’s the right gamble.” Her remarks came as Wall Street is digesting over $380 billion in AI-related spending across major tech companies.
According to CNBC, Lisa explained that many of AMD’s largest clients—especially hyperscalers—have been heavily investing in compute infrastructure over the past year, and they are now beginning to see returns. She described this phase as an “inflection point,” noting that paybacks are arriving faster than many had expected.
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**Wells Fargo Raises AMD Price Target to $345 Following Analyst Day**
At AMD’s recent analyst event, Wells Fargo came away particularly optimistic. The financial institution maintained its overweight rating on AMD and raised its price target from $300 to $345, forecasting a potential upside of 45%.
Analyst Aaron Rakers supported this upgrade with detailed insights. He highlighted AMD’s market share gains in both server chips and PC CPUs, as well as its expanding presence in datacenter GPUs. Most importantly, he noted that AMD’s profit engine is just getting started.
In his note, Aaron projected that AMD’s earnings per share (EPS) could surpass $10 by 2027, potentially exceeding $20 EPS by 2030. This outlook is based on AMD’s financial model, which anticipates annual revenue growth of more than 35%, with the datacenter segment alone growing over 60% each year.
While optimistic, Aaron also acknowledged potential risks, including possible tech roadmap delays, leadership changes, increased competition, and overly optimistic investor expectations.
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**Market Overview: Tech Slumps While Dow Hits Record High**
Despite AMD’s rally, the broader tech sector struggled. The Nasdaq Composite dropped 0.3%, reflecting a divergence in market performance. Meanwhile, the S&P 500 inched up 0.1%, but the spotlight was firmly on the Dow Jones Industrial Average, which surged 423 points (0.9%), setting a new intraday record.
The Dow’s gains were fueled by strong performances from financial giants such as Goldman Sachs, JPMorgan, and American Express, all hitting fresh highs during the session. Industrial stocks like Caterpillar also contributed, helping the Dow pull away from the tech-heavy Nasdaq.
Banking stocks followed suit with Morgan Stanley, Wells Fargo, and Bank of America reaching new highs. The Financial Select SPDR Fund (XLF), tracking financial stocks in the S&P 500, rose 1%, signaling where money was flowing.
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**Congressional Developments Boost Market Sentiment**
Market participants are closely watching Congress, where the Senate passed a spending package Monday night. The next step lies with the House of Representatives, where Republican House Majority Leader Steve Scalise indicated a final vote was expected around 7 p.m. ET Wednesday.
If approved, this could lead to the government reopening before the weekend, easing uncertainty for investors.
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**Sector Rotation Evident as Investors Shift Focus**
On Tuesday, the market’s split was clear. The Dow soared over 550 points as investors rotated out of high-priced growth stocks. Retail giants like Walmart, Home Depot, and McDonald’s lifted the index, while the health care sector emerged as the top performer.
Big pharmaceutical names like Eli Lilly and Johnson & Johnson led the charge in health care.
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