AMD Shares Rise 0.71% on Alibaba Order and Trump Policy Shift Despite 58% Volume Drop to 12th Rank

Market Snapshot

, 2025, , . , reflecting moderate investor engagement amid a mix of bullish and bearish signals. While the price gain was modest, the significant drop in volume suggested reduced short-term speculative activity or consolidation following recent volatility. The performance contrasted with broader market trends, , driven by strong demand for its AI accelerators.

Key Drivers

The most immediate catalyst for AMD’s stock movement was the reported potential order of 40,000 to 50,000 MI308 AI accelerators from Alibaba, a Chinese tech giant. Multiple news outlets highlighted this development, . The deal, if finalized, would mark a significant expansion of AMD’s presence in China’s AI infrastructure market, particularly after U.S. President Trump’s recent approval of limited GPU sales to the country. This regulatory shift, which applies to AMD, Intel, and Nvidia, has eased export restrictions that previously constrained access to Chinese clients. Analysts emphasized that the order signals Chinese firms’ continued reliance on Western chipmakers for high-performance AI hardware, despite domestic semiconductor development efforts.

Trump’s policy change directly bolstered AMD’s market position by enabling the resumption of GPU exports to China, a critical market for AI and cloud computing. The decision aligns with broader U.S.-China trade negotiations and reflects a strategic balance between national security and economic interests. For AMD, the policy shift not only opens access to Alibaba but also reinforces its competitive edge against rivals like Nvidia, which dominates the AI GPU sector. The company’s CEO, Dr. , further signaled engagement with Chinese authorities through a recent meeting with Commerce Minister Wang Wentao, underscoring efforts to strengthen business ties in the region. While no specific commitments were disclosed during the meeting, the diplomatic outreach highlights AMD’s proactive approach to navigating geopolitical challenges.

AMD’s Q3 2025 financial results also contributed to the stock’s performance, . This growth was fueled by robust sales of MI300 accelerators and early adoption of the next-generation MI400 series. The segment’s success reinforced investor confidence in AMD’s AI-focused roadmap, particularly as hyperscalers and enterprises expand their AI infrastructure. Additionally, , respectively) demonstrated the company’s diversified revenue streams. Analysts noted that AMD’s ability to maintain high-margin data-center growth while expanding into gaming and AI positions it as a key beneficiary of the global AI boom.

The competitive landscape further influenced sentiment, with AMD’s MI308 accelerators emerging as a viable alternative to Nvidia’s H100 GPUs. While Nvidia’s Blackwell platform maintains a technological edge, AMD’s lower pricing and improved performance for certain workloads have attracted cost-conscious clients. The potential Alibaba order underscores this dynamic, as the Chinese firm seeks to balance performance and cost in its AI infrastructure. Additionally, AMD’s collaboration with TSMC, the world’s leading semiconductor foundry, ensures access to advanced manufacturing processes, including 3nm and 4/5nm nodes. This partnership, highlighted in a Counterpoint Research report, solidifies AMD’s ability to meet rising demand for AI chips amid global supply chain constraints.

Despite these positives, challenges remain. AMD’s operating margin contracted year-over-year due to elevated R&D investments, reflecting the high costs of innovation in the AI space. , analysts caution that margins may remain under pressure through 2026. The recent stock pullback, , has tempered some enthusiasm, though the valuation multiple has improved. Investors are now weighing whether AMD can sustain its momentum against rivals like Intel and maintain its position in the rapidly evolving AI market.

In summary, AMD’s stock performance on December 22 was driven by a confluence of strategic, regulatory, and financial factors. The potential Alibaba order, Trump’s export approval, and Q3 revenue growth collectively reinforced investor confidence in AMD’s AI ambitions. However, the company’s ability to translate these developments into sustained profitability will depend on its execution against a backdrop of intense competition and evolving geopolitical dynamics.