AMD Rides Muse Hype to New Heights

Muse has done nothing but inspire AMD’s stock.

Shares of the chipmaker are up nearly 30% since Meta launched its instantly popular Muse AI agent on September 8, a rally that has catapulted AMD into the $1 trillion market cap club. So how much higher can AMD fly? Plenty, according to a report out yesterday from Citi analyst Atif Malik.

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That tracks with comments CEO Lisa Su gave to a gaggle of reporters in Taipei also on Tuesday; Su said the AI run will last for years, and that the company will “substantially increase our supply in 2027” to catch up to booming demand. After years watching GPU (graphics processing unit) king Nvidia dominate, the agentic era is AMD’s time to shine. That’s because agents use GPUs to think, a la large language models, but rely on CPUs to actually perform actions, such as managing email inboxes or shopping on e-commerce platforms that have not yet hung up a “No Robots Allowed” sign.

The total addressable market (TAM) for agentic AI is currently worth around $29 billion, but could explode to around $300 billion by 2030, Malik wrote, adding that AMD will be a key beneficiary. It’s why he increased his price target for the stock to $800 from $575. The TAM explosion may sound huge, but it is reflective of the rapid Muse takeoff:

• Meta’s app scored 5 million downloads in just 22 days, according to Sensor Tower. That’s a faster pace than ChatGPT (56 days) and Claude (492 days), and roughly on par with smash app successes like Pokémon Go, HBO Max and Fortnite. Last month, OpenAI also launched an always-on agent platform, Dots.
• Still, AMD faces plenty of competition. Nvidia earlier this year launched its Vera CPUs designed explicitly for the agentic era, while Wolfe Research analysts have said that rival Arm could capture as much as 50% to 75% of the agentic CPU market share overall (though the analysts also named AMD as a significant beneficiary of the agentic era).

AI’s a Small World: Amid its share price surge, AMD has made a splashy purchase. Last week, the company announced an $8 billion deal to acquire World Labs, which is developing “world models” that can create 3-D virtual environments out of just a few images. The company was started in 2024 by Fei-Fei Li, a Stanford University professor who has been dubbed “Godmother of AI.” In a Substack post announcing the deal, Li called AMD’s Su a “great friend.”