Chip stocks were rallying across the board on Wednesday, driven by a big earnings beat from AMD and Morgan Stanley naming Nvidia a top stock pick.

AMD spiked as much as 11% before paring gains to about 5% higher. Nvidia surged 12% at intraday highs. Other stocks getting a lift included ASML (up 11%), Qualcomm (up 6%), and Samsung (up 4%).

AMD beat on both the top and the bottom lines, while showing strong growth in its data-center business, fueled by sales of graphics processing units, which power AI technology.

In addition to riding AMD's wave higher, Nvidia was renamed Morgan Stanley's top semiconductor stock pick. The firm said a recent sell-off in the stock "presents a good entry point as we continue to hear strong data points short term and long term, with overblown competitive concerns."

The analysts said the stock had slid on concerns that would likely fade with time, like tighter customer capital-spending budgets, a tough competitive landscape, export controls, and supply-chain concerns.

"Through those concerns, the earnings environment is likely to remain strong, for NVIDIA and for the whole AI complex," the analysts said.

The semiconductor industry is also likely getting a boost from a Reuters report that said new US restrictions on chip exports from foreign companies to China may not apply to US allies such as the Netherlands, Japan, and South Korea.