What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) fell 3% in the morning session after its key rivals, Nvidia and Intel, announced a major strategic collaboration, creating a formidable competitor in the chip space.
The surprise deal saw Nvidia invest $5 billion in Intel, and the two semiconductor giants teamed up to jointly develop new chips for both AI data centers and personal computers. This partnership directly challenged AMD's position in those critical markets. The collaboration aimed to fuse Intel's x86 CPUs with Nvidia's powerful RTX graphics chiplets. This move appeared to worry investors because it threatened to weaken a key advantage AMD held. The new alliance between two of its biggest rivals presented a significant competitive threat, raising concerns about AMD's future market share.
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What Is The Market Telling Us
AMD’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 3.9% on the news that a strong outlook from software giant Oracle (ORCL) fueled optimism for companies exposed to artificial intelligence demand. Oracle's shares soared after the company boosted its outlook, citing booming AI demand.
This positive sentiment rippled across the semiconductor industry, lifting shares of AI chipmakers like AMD, Nvidia, and Broadcom. The move is also supported by broader strength in the sector, as recent data showed global semiconductor sales hit $62.1 billion in July 2025, a 20.6% year-over-year increase. This growth has been fueled by high demand for data center chips and memory products, reinforcing investor confidence in the industry's prospects.
AMD is up 27.7% since the beginning of the year, but at $154.06 per share, it is still trading 16.5% below its 52-week high of $184.42 from August 2025. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,056.
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