Arm Holdings plc (NASDAQ:ARM) and Advanced Micro Devices (NASDAQ:AMD) saw stock gains on Tuesday as investor sentiment improved in the semiconductor sector, driven by optimism surrounding AI chip supply chains. Arm's shares increased by approximately 5%, while AMD's stock also experienced significant upward momentum. The S&P 500 futures rose by 0.5%, reflecting a broader risk-on tone in the market.
Market Sentiment
Analysts noted that the market is currently focused on next-generation AI systems and their potential to enhance market share and revenue growth in data centers. AMD is preparing for its "Advancing AI 2026" event on July 22, which is anticipated to showcase updates on AI silicon and rack-scale systems. Investors are particularly interested in how AMD plans to compete with NVIDIA Corp. (NASDAQ:NVDA) in the AI space. The event could feature updates from companies like Anthropic, adding to the excitement.
Earnings Outlook
Both companies are set to report earnings soon. Arm is expected to release its results on July 29, 2026, with an estimated EPS of 36 cents and revenue of $1.27 billion, up from $1.05 billion year-over-year. AMD's earnings report is scheduled for August 4, 2026, with an EPS estimate of $1.55 and projected revenue of $11.28 billion, significantly higher than the previous year. Analysts maintain a positive outlook for both stocks, with Arm carrying a Buy rating and an average price forecast of $296.15, while AMD also holds a Buy rating with an average price target of $521.47.
The upward movement in Arm and AMD stocks could influence semiconductor ETFs, as both companies are heavily weighted in these funds. Increased buying or selling activity in these ETFs may lead to further price fluctuations in their respective stocks. Investors will watch for the upcoming earnings reports and the insights from AMD's AI event for indications of future performance.