Nvidia, AMD and Intel stocks moved higher before Thursday’s opening bell even after the Federal Reserve delivered its first rate increase in three years and signalled that more tightening could follow.
The Fed raised its target range by 25 basis points to 3.75%–4.00%, while 16 of 18 policymakers projected at least one additional increase this year.
That combination would normally be uncomfortable for richly valued semiconductor stocks.
Yet the trade is recovering in Thursday trading. Treasury yields eased and oil prices fell, reducing valuation pressure, while investors focused on company-specific demand that has not weakened with the macro backdrop.
Higher rates hurt valuations, but they do not create more AI chips
Higher risk-free rates reduce the present value of future earnings and make expensive growth stocks less attractive relative to Treasuries.
That pressure has not disappeared.
But the 10-year Treasury yield slipped back below 5% on Thursday as Brent crude fell for a second session, easing pressure on technology shares.
For Nvidia, the more important question is whether higher rates actually reduce demand for compute.
Max Kan of SemiAnalysis told Benzinga that “demand will continue to outstrip supply”, arguing investors may underestimate how much computing power is required for AI safety, alignment and monitoring.
That matters because slower frontier-model development would not automatically eliminate spending on inference, enterprise AI or safety workloads.
The Fed can raise the cost of capital, but cannot immediately manufacture more accelerators or advanced data-centre capacity.
AMD stock shows why earnings momentum can overpower macro trade
AMD provides the clearest company-level challenge to the simple rates-equals-selloff argument.
The shares gained more than 4% on Wednesday after Piper Sandler reiterated an Overweight rating and $600 target following AMD’s pre-quiet-period update.
Analyst David O’Connor said management’s message was reassuring, with CPU and GPU ramps progressing as expected.
The demand remains well ahead of available supply, while AMD appears to have enough capacity to support guidance and potentially exceed expectations.
Piper had already described AMD as an “Agentic AI Sweetspot”, pointing to server CPU share gains and the ramp of its Helios platform.
Higher yields can compress the multiple investors pay for AMD’s future profits. At the same time, revenue expectations can keep rising if supply-constrained demand remains strong and AMD continues taking share.
That is why another 25 basis points does not automatically overwhelm the earnings story.
Intel stock is trading a different scarcity story
Intel’s rebound has a different foundation because its rerating is increasingly tied to manufacturing assets rather than only AI accelerator demand.
Investors have become more interested in Intel’s foundry footprint as the US seeks greater domestic semiconductor capacity and the company works to improve utilisation of expensive fabs.
Melius Research analyst Ben Reitzes said “the AI ‘puck’ has skated toward Intel’s foundry asset” and “even $200 over 2 years is on the table”, according to Yahoo Finance.
Melius maintains a $165 target, with Reitzes arguing that Intel’s product and foundry businesses could support a higher sum-of-the-parts valuation.
That thesis is not risk-free, as Intel still needs external customers, better utilisation and stronger foundry economics to justify the rerating.
But it gives the stock a catalyst different from the pure AI-demand trade surrounding Nvidia and AMD.
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