Significant positive developments have emerged in the semiconductor sector, alongside reports that US-Iran negotiations are preparing to conclude the ongoing conflict.
The market's strong momentum continues, with a major breakthrough in US-Iran talks and a powerful earnings report from Advanced Micro Devices (AMD) adding further fuel. Global markets are reacting strongly to these developments.
**Positive Developments in US-Iran Negotiations** On the afternoon of May 6th, a major positive development emerged regarding the Middle East conflict. According to sources, the United States is close to reaching an agreement with Iran on a one-page memorandum of understanding. This memorandum aims to end the war and establish a framework for more detailed nuclear negotiations. The US expects Iran to respond on several key issues within the next 48 hours. While no agreement has been finalized yet, sources indicate this is the closest the parties have come to a deal since the war began. The proposed agreement would include: a commitment from Iran to suspend uranium enrichment; a US agreement to lift sanctions and release tens of billions of dollars in frozen Iranian funds; and the removal of restrictions on passage through the Strait of Hormuz by both sides. The current version of the memorandum would declare an end to the regional war and initiate a 30-day negotiation period to reach a more detailed agreement. This subsequent agreement would cover the opening of the Strait of Hormuz, restrictions on Iran's nuclear program, and the lifting of US sanctions. Sources suggest the related negotiations may be held in Islamabad or Geneva. A US official stated that during this 30-day period, restrictions on shipping in the Strait of Hormuz imposed by Iran, as well as the US maritime blockade, would be gradually lifted. Should the negotiations break down, US forces would be able to reinstate the blockade or resume military operations. Sources added that the US hopes to include a clause stating that any Iranian violations regarding uranium enrichment would lead to a corresponding extension of the suspension period. After the suspension period ends, Iran would be permitted to engage in low-level uranium enrichment, up to 3.67%. Iran would commit in the memorandum to never seek nuclear weapons or engage in weaponization-related activities. A US official mentioned that the parties are discussing a clause where Iran would pledge not to operate underground nuclear facilities. The same official also stated that Iran would commit to accepting a more robust inspection regime, including surprise inspections by UN核查人员. As part of the memorandum, the US would commit to gradually lifting sanctions imposed on Iran and gradually releasing tens of billions of dollars in frozen Iranian funds held worldwide. Influenced by this news, international oil prices plummeted sharply, while global stock indices surged.
**Positive News for the Semiconductor Sector** Beyond geopolitics, technology stocks also received a significant boost. Chip giant Advanced Micro Devices (AMD) saw its shares surge approximately 20% in pre-market trading. In a statement on Tuesday, AMD projected second-quarter revenue to be approximately $11.2 billion, plus or minus $300 million. This compares favorably to the average analyst estimate of $10.5 billion. AMD also provided strong long-term growth forecasts, further driving the stock price surge. Prior to the earnings release, AMD's stock had already risen 66% year-to-date; if the gains continue into Wednesday's regular trading session, the stock could reach a new all-time high. AMD's optimistic outlook indicates it is securing orders from major buyers of AI computing power. Although NVIDIA remains the dominant player in the AI processor market, data center customers are increasingly seeking alternatives, a trend that is benefiting AMD. AMD is the second-largest manufacturer in the AI accelerator market. AI accelerators are chips used for training and running AI services. However, AMD still trails far behind NVIDIA in this market. AMD's product line also includes microprocessors, the core chips for server computers. In this segment, AMD has been gaining market share from Intel. All three companies also produce graphics chips for laptops and desktop computers. AMD's first-quarter sales increased by 38% to $10.3 billion. Profit, excluding certain items, was $1.37 per share. Analysts had previously forecast revenue of $9.89 billion and earnings per share of $1.28. Revenue from its data center business grew 57% to $5.8 billion, surpassing the average analyst expectation of $5.61 billion. Sales related to personal computers increased by 23% to $3.6 billion. AMD is also benefiting from renewed market interest in its central processing units (CPUs). These general-purpose chips are increasingly being deployed in devices running AI software. AMD anticipates that the data center CPU market will "grow at a compound annual rate of more than 35%, reaching a scale exceeding $120 billion by 2030." This is a significant increase from the 18% annual growth rate projected during the company's analyst day last November. CEO Lisa Su stated on the analyst call, "To address this demand, we are working closely with our supply chain partners to significantly increase wafer and backend capacity to support this growth." AMD indicated that server CPU revenue is expected to grow by more than 70% this quarter, with "strong growth" continuing into the second half of 2026 and 2027. Su also expressed growing confidence that the company will achieve annual data center revenue in the tens of billions of dollars next year. She expects AMD to exceed its long-term growth target—an annual growth rate exceeding 80%—in the coming years.
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