AMD's Shares Experience an Uptick Today
AMD's Stock Soars on Lifted Export Bans and Strong Q2 Results
In a significant development, AMD's stock is on the rise today, following the U.S. government's decision to lift export bans on certain advanced semiconductor AI chips to China. This move is expected to have a positive geopolitical impact on AMD's potential sales and earnings.
The resumption of sales of AMD's MI308 AI chips to China could add significantly to its revenue. Optimistic projections for Q3 2025 revenue reach around $8.7 billion—up roughly 28% year-on-year—even before including any China exports under the new licenses. AMD's Q2 2025 results already showed record revenue of $7.7 billion, despite existing export limits to China, highlighting strong underlying demand and resilience.
From a geopolitical perspective, the U.S. government's move to permit controlled sales to China aims to balance restricting the most advanced chips while enabling U.S. companies to maintain competitive positions and revenues in the world’s largest semiconductor market. This policy shift also helps U.S. firms prevent losing ground to Chinese competitors who could otherwise develop or source comparable technology domestically.
Bank of America, in its recent coverage on AMD, predicts AMD's share of the central processing unit (CPU) market could rise from 20% in 2023 to 30% next year. AMD is already taking market share from Intel in the CPU space, with its processors commanding a 17% pricing premium compared to offerings from Intel.
The increased potential for a trade deal between the U.S. and China is beneficial for AMD, as it could further expand the market for AMD's high-performance GPUs, particularly in AI data centers. Sales results for AMD's GPUs for AI data centers will likely be the biggest factor shaping the stock's next moves when the company reports its Q2 results on Aug. 5.
In light of these developments, Bank of America has raised its one-year price target on AMD's stock from $175 per share to $200 per share. As of 12:30 p.m. ET, AMD's share price is up 2.6%. However, it's important to note that substantial geopolitical risk factors are still present in the U.S.-China relationship, and the AI race between the two nations has national security and economic implications.
The S&P 500 and the Nasdaq Composite were down 0.2% and 0.3% respectively, at the same time, suggesting that AMD's positive news is a standout performer in a wider market that is experiencing some downturn. AMD's stock had been up as much as 5% earlier in trading, reflecting the market's optimism about the company's prospects.
In conclusion, the lifting of export bans on AMD’s second-tier AI chips to China is poised to enhance AMD’s sales and earnings potential, supporting sustained growth in an important market while navigating complex U.S.-China technology tensions. This move could be a significant positive sales and earnings catalyst for AMD.
Investing in AMD's stocks seems attractive considering the positive impact of lifted export bans and strong Q2 results. This financial boost could be further elevated by the resumption of sales of AMD's AI chips to China, potentially increasing annual revenue by a significant margin. Moreover, the promising outlook of AMD's central processing unit (CPU) market share, along with its high-performance GPUs, makes it a technology stock to watch, especially in AI data centers.
