US chip stocks rallied sharply on Monday, as early signs of success for Meta Platforms' new artificial intelligence agent, Muse, ignited optimism around demand for related processors. Advanced Micro Devices, known as AMD, saw its shares jump as much as 10%, putting the company's market value on track to surpass $1 trillion for the first time by the closing bell.
Intel climbed over 14%, making it the best-performing stock in the S&P 500, while Arm Holdings surged 17%, and the Philadelphia Semiconductor Index advanced 3.9%.
Muse, which Meta launched earlier this month, quickly climbed to the top of the free app charts on Apple's App Store, reigniting investor enthusiasm for CPU makers, as these chips are essential for running AI agents.
According to data compiled by Bloomberg, Meta is AMD's second-largest customer, accounting for roughly 5.5% of AMD's revenue. Meta shares themselves rose as much as 12% on Monday, on pace for their best single-day performance since April 2025.
Wedbush analyst Matthew Bryson commented, "AI agents rely heavily on compute-driven applications. The two main compute players are really Intel and AMD."
Meta has stated that Muse can assist users with tasks such as online shopping, purchasing movie tickets, and making reservations. An Amazon spokesperson said the retail giant's website had blocked Muse on its platform on Sunday evening.
AMD has regained favor among investors in recent weeks, with its stock up about 30% month-to-date, heading for its biggest monthly gain since May. This comes after the shares fell nearly 26% from a June high to a July low.
If AMD's gains hold through Monday's close, it will join Micron, Broadcom, TSMC, and Nvidia as chipmakers with a market capitalization of at least $1 trillion. Bloomberg data indicates that 15 other publicly traded companies worldwide have reached or exceeded that valuation threshold.
Jefferies analyst Jacky He noted in a report that as AI agents gain wider consumer adoption, demand for server CPUs should benefit from increased inference workloads, task orchestration, and infrastructure requirements.