As of this writing, the shares of Advanced Micro Devices (NASDAQ: AMD) had risen 78% in 2025. Recent activity, however, indicates that some investors may be booking profits. Since reaching a 52-week high on October 29, AMD's stock has dropped 19%.
This decline may present a chance for investors to purchase a rapidly expanding business that is profiting from the use of artificial intelligence (AI).
This decline may present a chance for investors to purchase a rapidly expanding business that is profiting from the use of artificial intelligence (AI).
AMD will also benefit in 2026 from a recent announcement by President Donald Trump that permits businesses like Nvidia (NASDAQ: NVDA), AMD, and Intel to sell their cutting-edge AI chips to Chinese consumers.
Let's examine AMD's catalysts for the upcoming year in more detail to discover why this stock could surge once more. In 2025, AMD's company expanded at a respectable rate.
It is expected to generate $34 billion in revenue this year, a 31% increase over 2024 revenue. Since the Trump administration put export restrictions on sales of cutting-edge AI data center chips to China in April, AMD has been unable to sell its chips into that market, which could have been even better.
Consequently, AMD's inventory charge for the second quarter was $800 million. Furthermore, the Trump administration's action caused the corporation to lose a sizable portion of its revenue stream. This is due to the fact that China generated about $6.2 billion, or nearly a quarter, of AMD's $25.8 billion in revenue in 2024.
Analysts predict that the company's earnings will rise by 20% to $3.97 per share in 2025 despite the obstacle. According to consensus projections, AMD's earnings could increase by 62% to $6.46 per share in the upcoming year. It might perform much better than that, in my opinion.
Analysts predict that the company's earnings will rise by 20% to $3.97 per share in 2025 despite the obstacle. According to consensus projections, AMD's earnings could increase by 62% to $6.46 per share in the upcoming year. It might perform much better than that, in my opinion.
Consider Nvidia. Nvidia is now able to market its cutting-edge H200 chips to Chinese consumers thanks to the Trump administration.
In order to adhere to export laws, Nvidia used to only sell its smaller H20 chips in China. Compared to Nvidia's flagship Hopper processor, the H200, such chips were far less expensive and less potent.
Even after paying the 25% tax that the administration intends to impose on shipments to China, Nvidia will probably experience a sizeable increase in income the following year as a result of the shift.
Even after paying the 25% tax that the administration intends to impose on shipments to China, Nvidia will probably experience a sizeable increase in income the following year as a result of the shift.
In his Truth Social post, President Trump said that the "same approach will apply to AMD," implying that the business could be able to sell its expensive processors to Chinese consumers.
The reduced MI308 CPU was previously sold to Chinese consumers. As Nvidia has been permitted to do, it might now be able to ship its more potent chips into that market. Therefore, even with the 25% export fee, AMD might be able to recover the lost Chinese revenue in 2026.
This is due to the fact that a fully functional AMD data center graphics processing unit (GPU) will cost far more than the nerfed MI308. For this reason, AMD's sales for the upcoming year may be far greater than anticipated.
This is due to the fact that a fully functional AMD data center graphics processing unit (GPU) will cost far more than the nerfed MI308. For this reason, AMD's sales for the upcoming year may be far greater than anticipated.
Analysts predict that AMD's revenue would reach $44.6 billion in 2026, a 31% increase. Its top line would be around $51 billion if its income from China reaches $6.2 billion in 2024.
It's important to note that analysts haven't changed their projections for AMD's 2026 revenue in response to the Trump administration's rule change, indicating that the company's possible benefits from China aren't yet factored in.
AMD's market capitalization might increase to $561 billion if it generates $51 billion in revenue the next year and keeps its price-to-sales ratio at 11.
That suggests a possible 60% increase in its market capitalization. After its recent decline, this might be an excellent moment to purchase this semiconductor company because it has the potential to rise sharply in the coming year.
