Why is the stock of Advanced Micro Devices (AMD) rising today?

Key Points

• Oracle's contractual obligations of $455 billion increased 4 times year-on-year, demonstrating that the demand for AI remains strong.
• AMD and other chip stocks will benefit from the $$35 billion in capital expenditures that Oracle plans to invest next year.

Shares of Advanced Micro Devices are rising this Wednesday, up 2.2% as of 14:19 ET, although they had risen as much as 5.6% earlier in the day. This increase comes as the S&P 500 and the Nasdaq Composite gained 0.3% and 0.1%, respectively.

The action of the artificial intelligence chip maker is skyrocketing as investors react to the impressive results from Oracle, which revealed an order book close to $500 billion.

Oracle surprises Wall Street with huge outstanding obligations

Oracle reported earnings that include $455 billion in remaining performance obligations ( RPO ), essentially contracted future revenue that it must now deliver. The cloud infrastructure provider plans to deploy $35 billion in capital expenditures in its fiscal year 2026, indicating that demand remains strong for AI chips like those from AMD.

Although Nvidia will likely continue to be the big winner, AMD is in a position to capture a significant share of this spending. It may still be in second place, but the performance gap between its best chips and Nvidia's is narrowing. In such a vast market, second place is still excellent.

AMD is in a strong position

Oracle's commitment helps to allay recent fears that the wave of spending on AI data centers was showing signs of slowing down. If that were to happen, AMD and other chip manufacturers would be hit hard. The current level of demand allows manufacturers to expand margins by charging premiums that customers are willing to pay. Less demand would mean fewer units sold at a lower price. But Oracle's results indicate that this is not an issue, at least for now.

Although Nvidia remains the best AI infrastructure stock, in my opinion, AMD is also a solid choice.

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