Advanced Micro Devices Inc (AMD) stock price has surged by 2.69% in pre-market hours, gaining 13.80 points. The stock also closed at $512.58, a rally of 1.02% and an increase of 5.19 points. The upswing comes after Bernstein’s Stacy Rasgon increased the stock’s price target from $525 to $600. Rasgon maintains a “BUY” position with a 17.08% upside from current levels. AMD’s rally is commendable, given that the S&P 500, Nasdaq, and Dow Jones all traded lower.

AMD Stock Price Surges After Rackspace Technology Agreement

AMD’s rally also comes after the company announced an agreement with Rackspace Technology, an AI infrastructure and solutions provider. Rackspace Technology (RXT) climbed to an all-time high of $8.60 after the announcement.

AMD’s official website states that the agreement aims for “phased deployment of an initial 30 MW footprint dedicated to AMD-based compute deployments across Rackspace’s global data centers beginning in late 2026 through 2028.“

AMD’s stock price surge may have also stemmed from recent revival of CPU (Central Processing Unit) demand for agentic AI platforms. Intel CEO Lip-Bu Tan also reiterated that agentic AI models will lead to a resurgence of CPU demand, as opposed to relying solely on GPUs (Graphics Processing Units).

Also Read: Nvidia Stock Could Face A Serious Threat From AMD: Here’s How

AMD’s presence in both CPU and GPU markets gives the company an added benefit. Nvidia (NVDA), the current market leader, is more focussed on GPUs. If the CPU market ams up, AMD could see a massive upswing.

Risks You Should Know

AMD’s stock price surge over the last year is not only due to its GPU market, but also a revaluation based on how CPUs may play a larger role in agentic AI models. This development may also lead to more competition, not only from tradition x86 rival, but also from ARM-based chip manufactures. Nvidia (NVDA) has already revealed its RTX Spark ARM-based system that could pose a threat to AMD’s CPU market.

Secondly, inflation in the US is still above the 2% target and prices remain high. Federal Reserve Kevin Warsh announced that interest rates will remain unchanged to combat rising costs. Although the peace deal between the US and Iran may ease inflation figures, the unchanged interest rate may lead to retail players taking less risks. AMD’s stock price could suffer as a consequence.