Advanced Micro Devices Stocks Rise 2.66% on $2.5 Billion Anthropic Stake Commitment

Goldman Sachs believes the semiconductor selloff has been excessive, highlighting Nvidia (NVDA), Broadcom (AVGO), and AMD (AMD) as attractive investment opportunities. The firm notes that these stocks are now in oversold territory, with compelling valuations even under pessimistic scenarios. The call comes after a significant market downturn, with the Philadelphia Semiconductor Index down 21% over the past month.

U.S. stocks fell Tuesday after an inflation report showed higher-than-expected price increases, raising expectations for a larger Federal Reserve rate hike. The S&P 500 dropped 0.2%, the Dow Jones lost 0.4%, and the Nasdaq declined 0.1%. Fed Governor Christopher Waller suggested a 0.5% rate hike if inflation rose 0.3% from September, which it did, causing Treasury yields to spike. Nvidia fell 3.1%, while Advanced Micro Devices rose 5.5%.

The TSX opened lower on Tuesday due to higher U.S. inflation expectations and weaker commodity prices. Endeavour Silver reported a 29% revenue increase but lowered gold production guidance. Equinox Gold missed EPS estimates. Nvidia fell 3% amid CEO controversy. U.S. indices also declined post-inflation data.

Advanced Micro Devices (AMD) stock rose 5.0% after announcing a $5 billion investment in AI company Anthropic, securing an equity stake and supply deal. The move follows an Oppenheimer upgrade to Outperform with a $600 target, citing data center revenue growth. AMD's EPYC processors were also selected for Google Cloud's new TPU system. AMD's stock traded as high as $539.25, up from a prior close of $508.58.

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.