This article first appeared on GuruFocus.
Advanced Micro Devices (AMD, Financials) and Intel moved higher as investors reacted to fresh signs that advanced chipmaking capacity remains tight. AMD rose about 3% in premarket trading. Intel gained roughly 4%.
The move followed a report that Samsung Electronics has been speaking with companies including AMD, Alphabet, BYD and Tesla about future chip production. The report also said much of Taiwan Semiconductor Manufacturings leading-edge capacity is already spoken for.
For AMD, the idea is simple. The company depends heavily on TSMC for many of its most important chips. If Samsung can take on some future production, AMD may get more room to meet demand, especially in AI-related products.
Intels gain came from a different angle. The company is trying to build a larger foundry business, and tight supply at TSMC reminds investors that there are only a few companies capable of making the most advanced chips at scale.
The rally does not settle the debate around either stock. AMD still needs to show it can keep gaining share in AI chips, while Intel has to prove its manufacturing turnaround can attract real outside customers.
