Shares of Advanced Micro Devices (AMD 9.36%) jumped on Wednesday, finishing the day up 9.4%. The spike came as the S&P 500 and the Nasdaq Composite gained 0.4% and 0.6%, respectively.
The chipmaker's stock is continuing to surge after Oracle announced it intends to deploy 50,000 AMD chips by the end of 2026.
Oracle will use AMD
Oracle, an increasingly central player in AI cloud computing, will purchase 50,000 of AMD's next-generation MI450 chips to power its servers. The chips are designed to compete head-to-head with those of Nvidia.
This is the latest in a string of announcements that make clear that AMD has a much more substantial role to play in AI than it has up to this point. Just this month, OpenAI and AMD announced a major deal that could see the ChatGPT creator owning roughly 10% of the company in exchange for purchasing a large number of AMD chips.
Image source: Getty Images.
Speaking to AMD's growing role, Karan Batta, senior vice president of Oracle Cloud Infrastructure, said she expects customers "to take up AMD very, very well -- especially in the inferencing space."
AMD looks to be capitalizing on the AI opportunity, and if AI demand holds, it could do very well. While the stock is anything but cheap, it's a good pick given its growth prospects.
