Why are Advanced Micro Devices (AMD) stocks rising today?

Key points

• Oracle's contractual obligations for $455 billion increased 4 times compared to the previous year, demonstrating that the demand for AI remains strong.
• AMD and other chip companies will benefit from the $35 billion in capital expenditures that Oracle plans to invest next year.

Shares of Advanced Micro Devices are up this Wednesday, with an increase of 2.2% as of 2:19 p.m. ET, although they rose as much as 5.6% during the day. This gain comes as the S&P 500 and the Nasdaq Composite rose by 0.3% and 0.1%, respectively.

The chip maker for artificial intelligence is taking off as investors react to Oracle's impressive results, which revealed a pending portfolio of nearly $500 billion.

Oracle's Surprising RPO Impacts Wall Street

Oracle reported earnings that include $455 billion in remaining performance obligations ( RPO ), essentially future revenue already contracted that it now must deliver. The cloud infrastructure provider plans to deploy $35 billion in capital expenditures in its fiscal year 2026, noting that demand remains extremely high for AI chips like those from AMD.

Although Nvidia is likely to remain the biggest beneficiary, AMD is positioned to capture a significant portion of this spending. They may still be in second place, but the performance gap between their best chips and Nvidia's is narrowing. With such a huge market, second place is still excellent.

AMD is in a strong position

Oracle's commitment helps to dispel recent fears that the wave of spending in data centers for AI was showing signs of slowing down. If this were to happen, AMD and other chip manufacturers would be hard hit. The current level of demand allows manufacturers to expand margins by charging premiums that customers are willing to pay. Less demand would mean fewer units sold at a lower price. But Oracle's results indicate that this is not a problem, at least for now.

Although Nvidia remains the best stock in AI infrastructure, in my opinion, AMD is also a solid option.

It seems to me that AMD is smartly leveraging its market position. While it does not dominate like Nvidia, its strategy of narrowing the technological gap while keeping competitive prices could give it long-term advantages. Investors should keep an eye on how it manages this opportunity in such a volatile sector as AI semiconductors.