Wall Street's AI Bet Shifts: AMD and Intel Surge as Nvidia Takes a Back Seat

Since ChatGPT ignited the generative AI boom in late 2022, Nvidia has been the undisputed king of the infrastructure buildout. But a notable shift is underway on Wall Street. While Nvidia remains a powerhouse - expected to post 70% revenue growth this fiscal year - investors are increasingly piling into companies that were barely on the radar during AI's early days.

This week delivered the clearest signal yet of what Mizuho analyst Jordan Klein calls a potential 'changing of the guard.' AMD and Intel shares jumped roughly 25%, memory maker Micron surged over 35%, and fiber-optic specialist Corning climbed about 20%. All four have more than doubled in value this year, with Intel leading the pack - up well over 200%. Nvidia, by contrast, has gained just 16% in 2026.

The money flowing into a broader set of hardware companies suggests investors believe the AI bull market has staying power, and that data centers will require a diverse range of advanced components for years. Memory has been the hottest theme lately, driven by a global shortage that has sent prices soaring. Micron, a 47-year-old semiconductor player, blew past an $800 billion market cap this week, with shares up over 750% in the past year. CEO Sanjay Mehrotra told CNBC that key customers are receiving only '50% to two-thirds of their requirements.'

Beyond memory, central processing units (CPUs) are making a comeback. As the focus shifts from chatbots to AI agents, demand for CPUs - long overshadowed by Nvidia's GPUs - is surging. Bank of America projects the data center CPU market could double from $27 billion in 2025 to $60 billion by 2030. AMD's quarterly results underscored the trend, with earnings and guidance beating estimates on strong data center growth. CEO Lisa Su noted that server CPU growth expectations have nearly doubled, from 18% to 35% over three to five years, driven by agent-based AI workloads.

Intel, meanwhile, is staging a revival after years of lagging behind in AI. The stock had its best month on record in April, more than doubling, and gained another 33% in early May following reports of a potential deal with Apple to manufacture processors for U.S. devices. Representatives from both companies declined to comment.

Elsewhere, Corning - celebrating its 175th anniversary - inked a massive deal with Nvidia this week, giving Nvidia the right to invest up to $3.2 billion in the glass maker. The partnership focuses on fiber-optic technology for Nvidia's rack-scale systems, a shift away from copper cables. Corning's stock hit a record in February, finally surpassing its dot-com-era high from 2000.

But not everyone is bullish. BTIG analyst Jonathan Krinsky warned that the semiconductor sector's markup resembles 1999, with the PHLX Semiconductor Index up 66% this year. He sees a 25% to 30% correction ahead, calling the move 'in some ways more extreme' than the dot-com bubble.

Source: CNBC