Why Advanced Micro Devices Stock Gained 10% in September

Shares of Advanced Micro Devices (NASDAQ: AMD) were moving higher last month as the result of a number of news items, the Federal Reserve's 50-basis-point cut, and a general tailwind in the semiconductor sector.

According to data from S&P Global Market Intelligence, the stock finished the month up 10%. As you can see from the chart below, the stock's movement mirrored that of the VanEck Semiconductor ETF, but it gained at a higher rate, showing that while it was subject to the same trends as its industry, it was able to outperform it.

AMD data by YCharts

AMD gets an edge

AMD has generally been a winner in the AI boom, though the company is only just starting to assert itself as a key supplier with its MI300 data center GPU, which saw strong growth in the second quarter.

In September, several small news items made the stock a winner.

First, AMD announced its "Advancing AI 2024" event, scheduled for Oct. 10. The company plans to show off its next-generation AMD Instinct accelerators and fifth-gen AMD Epyc server processors.

It's no secret that artificial intelligence (AI) has taken center stage in the chip sector, and investors are paying close attention to AMD's AI product offering. The stock jumped 5% on Sept. 11 on high volume following that announcement.

Cathie Wood's Ark Invest also added to its AMD holdings, purchasing 45,500 shares that week, a positive sign for investors who closely follow her moves.

The following week, Reuters reported a victory over Intel to design a key chip for Sony's PlayStation 6, and Citigroup reiterated AMD as a top AI pick. AMD also got a boost on the Fed's rate cut, gaining 4.5% on Sept. 19, along with a broader upswing in the market.

Finally, AMD scored another win toward the end of the month as Oracle Cloud Infrastructure said it would use AMD's Instinct MI300X accelerators, a key win for the new chip, which competes with Nvidia's AI accelerators.

Image source: Getty Images.

What's next for AMD?

All eyes will be on the Oct. 10 AI presentation, and the stock is likely to move on the news. Investors will be expecting some new products that can move the needle for AMD, especially as it looks best positioned to challenge Nvidia in the data center GPU market.

If AMD can execute on that opportunity, the stock could have a lot of room to run from here.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices. The Motley Fool has a disclosure policy.