This article first appeared on GuruFocus.

Advanced Micro Devices (NASDAQ:AMD) briefly crossed a $1 trillion market capitalization for the first time Monday as surging demand tied to AI agents pushed investors toward central processing unit makers. AMD shares jumped more than 8% to a record $615.99 before closing near $609.65, leaving the chipmaker valued at roughly $995 billion. The milestone suggests investors are broadening their AI bets beyond graphics processors as agentic AI workloads create a potentially larger role for CPUs.

AMD became the fourth U.S. chipmaker to cross the $1 trillion threshold, joining Nvidia (NASDAQ:NVDA), Broadcom and Micron (NASDAQ:MU). The enthusiasm extended across CPU suppliers, with Intel (NASDAQ:INTC) jumping 12.03% to $121.67 and Arm (NASDAQ:ARM) Holdings surging 15.47% during the same session.

The catalyst is the rapid adoption of Meta (NASDAQ:META) Platforms' Muse consumer AI app, which recently climbed to the top of the U.S. iPhone App Store. Running live software agents requires substantial CPU capacity alongside the graphics processors that have dominated the first phase of the AI infrastructure boom.

That demand is already tightening supply. Intel CEO Lip-Bu Tan said CPU demand has become so strong that the company can currently fulfill only about half of customer orders, underscoring how quickly AI infrastructure requirements may be shifting.

AMD sees a sizable runway. CEO Lisa Su said the company has raised its server CPU total addressable market outlook to grow more than 35% annually and exceed $120 billion by 2030, while the broader data-center CPU opportunity could reach as much as $220 billion. Management links that acceleration directly to agentic AI workloads.

Investor Takeaway

For AMD investors, the key question is whether the latest rally reflects a durable expansion in CPU demand or expectations that have moved ahead of fundamentals.

Investors should watch server CPU growth, supply availability and evidence that AI-agent workloads continue requiring materially more general-purpose compute. Continued shortages and accelerating data-center CPU spending would strengthen AMD's case for taking a larger share of AI infrastructure budgets.

The risk is that agent demand normalizes or GPU-heavy architectures limit the CPU opportunity. After an 8% single-day surge and a brief $1 trillion valuation, execution will increasingly need to justify the market's rapidly expanding expectations.