Why is Advanced Micro Devices stock rallying today?

Anthropic, an AI company, disclosed that Nvidia, Alphabet, AMD, Micron, Broadcom, Microsoft, and TSMC Partners will invest $26 billion in its IPO. Nvidia and Google each commit $10 billion, while others invest smaller amounts. The funds will support Anthropic's $900.9 billion infrastructure spending over 20 years, with $70.7 billion due by September 2027.

NVIDIA's stock fell 4% to $170.67 after its board launched an investigation into CEO Jensen Huang. The probe follows reports of an alleged extramarital affair and potential national security concerns. NVIDIA's Q2 FY2027 revenue was $96.22 billion, up 105.8% YoY, with strong guidance for Q3. AMD and Broadcom gained 3% as investors rotated to rivals. The outcome of the board's investigation and NVIDIA's next earnings report are key catalysts.

US stocks fell Tuesday after an inflation report showed higher-than-expected price increases, raising expectations for a larger Fed rate hike. The S&P 500 dropped 0.2%, while the 10-year Treasury yield rose to 4.98%. Nvidia declined 3.1%, and GE Vernova fell 5.4%, while AMD gained 5.5%.

Seven tech companies, including Alphabet, Nvidia, and Microsoft, reportedly plan to invest $26 billion in Anthropic's IPO. The companies involved are Alphabet, Nvidia, Microsoft, AMD, Broadcom, Micron Technology, and Taiwan Semiconductor Manufacturing. Anthropic has not confirmed the figure, and the reported pricing was deemed inaccurate. The investment would be alongside the IPO offering, with Google having an option to buy up to $10 billion in Class N stock.

AMD's 5th Gen EPYC processors are now powering Google Cloud's TPU 8tx systems, offering hardware-enforced confidential computing for AI workloads. This collaboration aims to protect sensitive data during processing, positioning AMD as a key player in secure AI infrastructure. According to AMD and Google Cloud, the system enables secure, large-scale AI tasks while ensuring data privacy.

AMD forecasts $17 billion in Q4 revenue, surpassing Intel's $15-16 billion estimate. AMD's revenue has grown eightfold since 2016, while Intel's has declined 11%. AMD's data center sales nearly doubled in Q3, and CEO Lisa Su expects over 80% revenue growth by 2027, with data center sales exceeding 80% of total revenue. AMD trades at 30x forward earnings, below its three-year average of 39x.