Key Highlights

● The Philadelphia Semiconductor Index closed at 11,684.00.

● AMD designs processors, graphics chips and AI accelerators.

● The rally was sparked by SK hynix's record results.

● Skeptics warn an eventual AI capex slowdown remains possible.

Advanced Micro Devices (NASDAQ:AMD) rose on Wednesday, October 28, riding a wave of buying across semiconductor stocks that pushed the sector's benchmark higher for a fourth consecutive session.

The Philadelphia Semiconductor Index closed at 11,684.00, extending a run that has helped the Nasdaq outperform this week. AMD's gain was solid rather than spectacular, and the stock moved with the group rather than on news of its own.

A Rally Led by Memory

The spark came from South Korea. SK hynix (NASDAQ:SKHY) reported its first quarter with more than 100 trillion won in revenue, roughly $78.7 billion, and said it expects the memory shortage to last into 2030. Its US-listed shares jumped and the KOSPI soared.

That lifted memory names first. Micron (NASDAQ:MU) climbed and Sandisk (NASDAQ:SNDK) soared. The enthusiasm then spread to chip-equipment makers such as Lam Research (NASDAQ:LRCX) and Applied Materials (NASDAQ:AMAT), and to designers including AMD, Arm (NASDAQ:ARM) and Marvell (NASDAQ:MRVL). Nvidia (NASDAQ:NVDA) was the odd one out, slipping even as most of the sector climbed.

Where AMD Fits

AMD designs processors for personal computers and servers, graphics chips for gaming, and accelerators for AI data centers that compete with Nvidia's products. Its fortunes are closely tied to how much cloud providers and enterprises spend on computing infrastructure.

That made the day's AI headlines directly relevant. Vertiv Holdings (NYSE:VRT) rocketed after its orders more than doubled, and Oracle (NYSE:ORCL) soared after setting a $225 billion revenue target for fiscal 2030. Both pointed to continued heavy investment in the data centers that use AMD's chips.

Not All Bulls

Skeptics remain. BCA Research's Peter Berezin said he thinks the market is heading for an AI capex bust, though probably not until 2028. The S&P 500 rose 21.38 points to 7,743.98, its third straight gain, and the Nasdaq Composite added 72.04 points to 26,549.85.

The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote, with two officials dissenting in favor of a hike. Technology was the best-performing sector, while utilities and real estate trailed as long-dated Treasury yields climbed.

What to Watch

The chip rally faces a test on Thursday. After the bell on Wednesday, Alphabet (NASDAQ:GOOGL) slid sharply in extended trading after a profit miss and negative free cash flow, and chip stocks including Micron and Nvidia slipped in sympathy. Microsoft (NASDAQ:MSFT) rose after its Azure cloud business accelerated.

Amazon (NASDAQ:AMZN) reports after Thursday's close, and Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) report later this week. The advance third-quarter GDP estimate and September PCE inflation data arrive at 8:30 a.m. ET on Thursday.