Intel INTC and AMD shares rose on Thursday even as broader markets and semiconductor stocks remained under pressure before turning flat, as renewed optimism around Meta Platforms’ Muse AI assistant added to the recent enthusiasm for CPU makers.
The S&P 500 and Nasdaq Composite were almost unchanged, with a 0.03% and 0.02% decline, respectively, as Treasury yields continued to climb, with the 30-year Treasury yield reaching 5.446%, its highest level since June 2004.
The benchmark 10-year yield rose to 5.15%, close to levels last seen in July 2007.
Meta shares, meanwhile, climbed more than 3.5% on Thursday after several analysts raised their price targets following the company’s Meta Connect event.
Muse boosts CPU demand thesis
Meta’s growing focus on agentic AI has emerged as an unexpected catalyst for Intel, AMD and Arm, as investors assess whether increasingly autonomous AI systems could require more computing power from CPUs alongside graphics processors.
Intel shares have gained sharply since Monday, when the broader thesis around agentic AI helped lift Intel, AMD and Arm.
Intel shares have gained more than 13% in the last five trading sessions.
AMD also crossed the $1 trillion market-capitalisation threshold for the first time on Monday after the surge.
Its shares remain 14% higher in the last five trading sessions.
The argument is that AI agents performing more tasks independently could increase demand for general-purpose computing, potentially benefiting the server CPU market.
Meta has previously said that as its agentic AI efforts advance, “compute requirements are evolving to demand more CPU.”
That could expand the addressable market for Intel, AMD and Arm, all of which have exposure to server CPUs.
“The market has interpreted Muse as a boon for the already significantly bottlenecked CPU market,” said Michael O’Rourke, chief market strategist at JonesTrading.
The thesis received another boost at Meta Connect on Wednesday, where Meta outlined plans to make Muse a central component of its hardware ecosystem.
Meta pushes Muse across devices at Meta Connect
Meta introduced Meta Charm, a small handheld device designed to provide users with direct access to Muse.
Meta said Charm will ship during the December holiday period, although it did not disclose a price.
The device represents a broader effort by Meta to make its AI assistant accessible through hardware controlled by the company, reducing reliance on smartphone operating systems operated by Apple and Google.
Users will be able to access Muse directly through Charm rather than relying on AI applications running on their smartphones.
“It is actually quite clear personal superintelligence will not only come first; it will be much bigger and more important,” Zuckerberg said at the company’s conference.
“So we have shifted our focus to building the best devices for personal superintelligence,” he said, adding that Muse would also soon be available across Meta’s smart glasses lineup.
Meta is also expanding Muse’s capabilities through partnerships with Walmart, Best Buy, Sephora, Wayfair, Dick’s Sporting Goods and Gap.
Many analysts, including JPMorgan, Citizens, KeyBanc and others, raised their targets on Meta.
Intel faces a valuation test
While Meta’s announcements have strengthened the broader AI hardware narrative, Intel’s valuation remains a focus for investors following its enormous gains over the past year.
TD Cowen reiterated a Hold rating on Intel with a $115 price target, below the stock’s current level.
The firm used a sum-of-the-parts framework to assess the company’s valuation and said progress in its foundry business remains important.
However, TD Cowen said Intel’s Products division remains the most important driver of value.
The firm said investors need greater visibility into a path toward more than $100 billion in Products revenue and more than $20 billion in Foundry revenue.
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