Meet the Major Artificial Intelligence (AI) CPU Player That Just Joined Nvidia, Tesla, and Palantir as One of the Most Popular Stocks on Robinhood

The online investing platform Robinhood Markets (NASDAQ: HOOD) is one of the go-to places for retail investors to buy stocks, as well as for other banking activities the platform now offers. Robinhood is also a good platform for gauging retail sentiment, which is important given retail's increased presence in the broader market.

Each month, Robinhood lists the 10 most widely held stocks on its platform. While the list is full of the usual top stocks (Nvidia, Tesla, and Palantir Technologies, for example), new entrants find their way in every now and again.

One major artificial intelligence (AI) central processing unit (CPU) company just joined this exclusive group.

Image source: Getty Images.

How agentic AI is forging new AI stars

In just a few years, AI has evolved significantly. Nvidia rose to prominence for its dominance in the graphics processing unit (GPU) space. These are general-purpose chips used for training large language models (LLMs). While the GPU market is still alive and well, another AI segment is getting more attention: agentic AI.

Agentic AI refers to AI systems, or agents, that carry out tasks autonomously or with very limited human interaction. This includes various workflows and digital tasks.

While GPUs still play a significant role in agentic AI, companies have figured out that CPUs are also incredibly important for the nuts and bolts of certain tasks. These include orchestration, memory management, and many of the steps that actually carry out a task, whether it's pulling data or interacting with the tools that make a task possible.

Interestingly, CPUs were considered old news at the beginning of the AI rally because they were at the foundation of computers and cellphones, among other devices and systems now considered legacy technology to some extent. However, agentic AI has led to a rebirth for CPUs, and massive demand has followed.

One company that has benefited is Advanced Micro Devices (NASDAQ: AMD), which is now the ninth-most widely held stock on Robinhood. AMD also designs custom GPUs, so it has always been part of the AI trade, but demand for CPUs has bolstered the bull case for the stock, which is up roughly 154% this year (as of June 30).

The company is fabless, meaning it designs GPUs and CPUs and then outsources manufacturing. AMD began to see this CPU demand reflected in its 2026 first-quarter results. Revenue in its data center division, which includes GPU and CPU sales, surged 57% year over year to nearly $5.7 billion.

AMD CEO Lisa Su said on the company's first-quarter earnings call:

[O]ver the last few months, as we've talked to our customers and we've seen how AI adoption is really unfolding, you know, we're seeing significantly more CPU demand from really every major cloud provider as well as enterprise customers ... [t]he way that comes across is as AI adoption scales, you need more inferencing. As inferencing scales, you know, you have more agents and agentic AI, they all require CPUs for you know, all of the orchestration and the data processing and these other tasks.

Does AMD still have upside after such a big run?

After such a big run this year and the past five years (479%), investors may be wondering if the bull case has been priced in. The average price target from all 35 Wall Street analysts who have issued research reports in the past three months suggests the stock is fairly valued, according to TipRanks.

Some analysts still see upside. Recently, Cantor Fitzgerald analyst C.J. Muse raised his price target by $200 to $700 per share, suggesting another 34% upside from current levels. Muse sees AMD benefiting from the continued supply chain crunch, which he expects to expand total industry revenue to roughly $3 trillion by 2029. As a leader in the CPU space, this should benefit AMD.

While Muse could certainly be right, this also means AMD's upside depends on AI demand, which looks quite strong right now. However, there are also real questions about how long this cycle can last and whether there will be real roadblocks or corrections along the way.

Given this reason and the fact that AMD now trades at 70 times forward earnings, I am more prone to be cautious here.

AMD is a company that will certainly benefit from the rise of agentic AI, but the market looks a bit frothy, especially in AI. For these reasons, I would not advise taking a large position right now, and would recommend dollar-cost averaging if you do choose to buy the stock.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.