Shares of Advanced Micro Devices (AMD -1.05%) are rising on Wednesday, up 2.2% as of 2:19 p.m. ET but were up as much as 5.6% earlier in the day. The gain comes as the S&P 500 and the Nasdaq Composite gained 0.3% and 0.1%, respectively.
The artificial intelligence (AI) chipmaker's stock is jumping as investors react to Oracle's massive earnings, which revealed a nearly $500 billion backlog.
Huge Oracle RPO shocks Wall Street
Oracle reported earnings that included $455 billion in total remaining performance obligations (RPOs), essentially future revenue for which it is already contracted and now must deliver on. The cloud infrastructure provider plans to deploy $35 billion in capital expenditures (capex) in its fiscal 2026, signaling demand is still white hot for AI chips like those from AMD.
While Nvidia will likely remain the biggest winner here, AMD stands to capture a meaningful share of this spending. It may still be playing second fiddle, but the performance gap between its best chips and those from Nvidia is narrowing. With such a huge market, second place is still a great place to be.
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AMD is in a solid position
Oracle's commitment helps cool fears in recent weeks that the AI data center spending spree was showing signs of slowing down. If it does, AMD and other chipmakers will be hit hard. The level of demand means chipmakers can expand margins by charging a premium that customers will pay. Less demand means fewer units sold at a lower price. But Oracle's earnings indicate this is a non-issue, at least for the time being.
While Nvidia is still the best AI infrastructure stock, in my opinion, AMD is a solid pick as well.
