Why AMD Stock Soared Today
Key Points
A new report suggests that IBM could use AMD's chips for quantum computing applications.
AMD stock also got a boost from bullish macroeconomic news.
Inflation came in lower than expected last month.
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Advanced Micro Devices (NASDAQ: AMD) stock posted big gains Friday, thanks to some exciting news on the quantum computing front. The company's share price surged 7.6% higher in the daily sessions. Meanwhile, the S&P 500 gained 0.7%, and the Nasdaq Composite gained 1.1%.
AMD stock popped today following news that International Business Machines sees uses for the company's chips in quantum computing applications. The company's share price also got a boost from better-than-expected inflation data.
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AMD pops on IBM quantum news
A recent Reuters report suggests that IBM will be using AMD's semiconductors in order to run algorithms that help correct quantum computing errors. The report states that a research paper is on track to be published next Friday that will break down how AMD's field-programmable-gate-array (FPGA) chips can play an important role in improving the efficiency and capabilities of quantum computing systems. Quantum stocks have been on a tear lately, and signs of an expanding position in the space for AMD helped power big gains for AMD stock.
Today's inflation data brought good news for AMD investors
The Bureau of Labor Statistics published consumer price index (CPI) data for September this morning. While last month's CPI inflation accelerated to 3%, it still came in below the 3.1% level forecasted by economists. Despite the uptick in inflation, last month's level still seemingly supports the case for the Federal Reserve to cut interest rates later this month.
Investors also became increasingly bullish about the potential for another rate cut when the Fed meets again in December. Lower rates tend to create more favorable backdrops for growth stocks, and additional rate cuts could help sustain bullish momentum for AMD.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and International Business Machines. The Motley Fool has a disclosure policy.
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