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Why Nvidia and AMD Stocks Rose Today

By Joe Tenebruso - Jan 11, 2021 at 7:10PM

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Surging PC sales bode well for the semiconductor leaders.

What happened

Shares of Nvidia ( NVDA -3.80% ) and Advanced Micro Devices ( AMD -5.85% ) climbed on Monday following the release of preliminary results from International Data Corporation's Worldwide Quarterly Personal Computing Device Tracker. 

By the close of trading, Nvidia and AMD were up 2.6% and 2.8%, respectively, after rising as much as 5.2% and 4.9% earlier in the day.

So what

Global PC shipments jumped 26.1% year over year to 91.6 million units, according to IDC. The gains were fueled in part by more people working from home during the COVID-19 crisis.

A person holds an upwardly sloping digital chart.

PC sales are soaring during the coronavirus pandemic. Image source: Getty Images.

Yet IDC notes that demand for gaming systems also contributed to the strong growth in PC shipments. "The obvious drivers for last year's growth centered around work-from-home and remote-learning needs, but the strength of the consumer market should not be overlooked," IDC Program Vice President Ryan Reith said in a press release. "We continue to see gaming PCs and monitor sales at all-time highs."

Now what 

Strong PC sales suggest solid demand for AMD's and Nvidia's chips. AMD is taking share from semiconductor giant Intel, which is struggling with costly production delays. Nvidia, meanwhile, holds a commanding share of the graphic chip market, which is being boosted by rising demand for gaming systems.

Judging by IDC's report, both of these chip leaders are likely to report impressive financial results in the quarters ahead.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

NVIDIA Corporation Stock Quote
NVIDIA Corporation
NVDA
$314.35 (-3.80%) $-12.41
Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
AMD
$149.11 (-5.85%) $-9.26

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