AMD stock soars to new record as semiconductors bounce: Chart of the Day

Chip stocks were back in the driver's seat on Monday as the PHLX Semiconductor Index ( ^SOX ) surged more than 3%.

An upcoming state dinner between President Trump and Chinese leader Xi Jinping, with numerous AI titans expected to be in attendance , fueled optimism about the AI trade.

Chipmaker AMD soared to an all-time high above $610 a share, giving it a $1 trillion market cap during the trading session.

Shares of central processing unit designer Arm Holdings ( ARM ) and chipmaker Intel both rose 10% as social media giant Meta's (META) new AI agent MUSE sparked a broader rally among server CPU suppliers.

The chip sector has seen additional tailwinds, including a report last week that SK Hynix ( SKHY ) is exploring a deal with Intel ( INTC ).

Shares of Intel have rallied more than 35% over the past month, while AMD and ARM Holdings are up nearly 30% over the same period, according to Yahoo Finance's AlphaSpace data.

AI chip heavyweight Nvidia ( NVDA ) has gained more than 4% over the past month.

Chip stocks have been rebounding from a slump after hitting a peak in July amid concerns about overinvestment and, more recently, worries over a slowdown flagged by AI titans.

However, Wall Street sees little sign of a spending slowdown as hyperscalers race to build out data centers and AI inference usage surges.

Last week, BofA analyst Vivek Arya argued that the semiconductor industry has a long runway ahead, citing hardware and power constraints.

Arya raised his 2030 chip market estimate from $2.7 trillion to $3.2 trillion, driven by overwhelming demand for data center capacity, advanced logic, and memory equipment.

Ines Ferre is a senior business reporter for Yahoo Finance.