AMD (NASDAQ: AMD) and Qualcomm (NASDAQ: QCOM) rallied sharply in afternoon trading as semiconductor stocks rebounded alongside a broader Nasdaq recovery of 1.8%.
The catalyst behind the session’s gains was President Trump’s announcement of an Iran peace deal, which immediately relieved the interest rate pressure that had weighed heavily on the sector throughout the week.
Oil prices fell more than 3% following the announcement, and the 10-year Treasury yield dropped to 4.47%, easing fears of further rate hikes that had driven the sector’s worst weekly performance since 2020.
Semiconductor stocks trade at elevated multiples based on future earnings projections, making them disproportionately sensitive to shifts in interest rates and discount rate expectations.
AMD shares jumped 7% on the session, while Qualcomm rose 5.6%, as investors moved back into chip names after the macro picture improved considerably through the afternoon.
Intel received a double upgrade from Bank of America to a price target of $135 earlier in the day, confirming that hyperscalers are placing real production orders at domestic foundries and that AI infrastructure capital expenditure commitments remain intact.
The structural AI demand story that underpins much of the semiconductor sector’s valuation never fundamentally broke, with the BofA upgrade serving as a key signal to investors that the longer-term thesis remained solid.
Prior to Thursday’s recovery, AMD had dropped 5% just one session earlier after a CPI print showing 4.2% annual inflation, the hottest reading since 2023, revived fears of a Federal Reserve rate hike as soon as December.
Additional selling pressure had come from the SpaceX IPO, which closed investor orders ahead of its debut at a $1.77 trillion valuation, with analysts identifying chip names among holdings facing the largest forced outflows as investors reallocated capital to fund the listing.
AMD has logged 41 individual moves greater than 5% over the past year alone, reflecting just how volatile the stock has become as macro forces and AI sentiment continuously reprice the sector.
AMD is up 118% since the beginning of the year, and at $486.20 per share, the stock remains 10.4% below its 52-week high of $542.52 reached earlier in June 2026.
Investors who purchased $1,000 worth of AMD shares five years ago would today be holding a position worth $5,980, underscoring the substantial long-term gains the chipmaker has delivered despite short-term volatility.
Thursday’s session illustrated how quickly sentiment in the semiconductor space can reverse when macro conditions shift, with the Iran deal providing the relief valve the market needed after a bruising stretch of inflation-driven selling.
