AMD stock gained 3% on Friday as technology shares rallied following weaker-than-expected US employment data that reduced expectations for another Federal Reserve interest-rate hike.
The US economy added 29,000 jobs in September, the nonfarm payrolls report showed, while the unemployment rate rose to 4.2%.
The Dow Jones consensus had expected payrolls to increase by 84,000, with unemployment remaining at 4.1%.
The softer labour market data pushed Treasury yields lower. The 10-year Treasury yield fell one basis point to 5.25%, while the two-year yield was flat after initially declining following the employment report.
The data strengthened expectations that the Federal Reserve could leave interest rates unchanged at its October meeting, supporting demand for technology stocks.
AMD’s gains also come as the company expands its presence in AI infrastructure through new customer deployments and its planned acquisition of artificial intelligence startup World Labs.
HPE announces $1.2B AMD AI rack order
Hewlett Packard Enterprise announced on Wednesday that Vultr had placed a $1.2 billion order to deploy AMD’s Helios AI rack architecture.
Each integrated rack combines 72 AMD Instinct MI455X GPUs with AMD EPYC processors and Pensando Vulcano AI network interface cards.
The systems also use HPE’s direct liquid cooling technology and scale-up switching software.
The order highlights AMD’s push to supply complete AI infrastructure as demand for computing capacity expands.
AMD’s AI business has increasingly focused on products designed for large-scale computing workloads.
The Helios architecture brings together AMD’s GPUs, processors and networking technology in an integrated rack system.
AMD’s World Labs deal targets next-gen AI
AMD announced on Tuesday that it had agreed to acquire World Labs for $8.2 billion in an all-stock transaction.
World Labs is an AI startup focused on spatial intelligence and three-dimensional world models.
Under the transaction, its founder and AI researcher Fei-Fei Li will join AMD as executive vice president and chief scientist, reporting directly to CEO Lisa Su.
World Labs develops AI models capable of creating and simulating three-dimensional environments.
Earlier this year, Li and Su demonstrated the company’s Marble model, which can generate a 3D scene from a small number of images.
AMD said the technology could have applications in robotics and other physically grounded AI systems.
The company also expects World Labs’ research to help it anticipate the requirements of future AI models and guide processor development.
World Labs will remain separate from AMD’s chipmaking business until the transaction closes later this year.
The $8.2 billion deal would be AMD’s second-largest acquisition, behind its approximately $50 billion purchase of Xilinx in 2022.
According to WSJ data, analysts currently have a consensus overweight rating on AMD.
Forty-seven analysts have an overweight or buy rating, while ten have a hold rating, with no sell ratings listed.
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