AMD Stock on Fire: Investor Sees More Upside Ahead

AMD stock has surged 83% in the past three months, driven by renewed market optimism, strong Q1 2025 earnings, and AI infrastructure investments by hyperscalers. Investor Cash Flow Venue believes the rally has just begun, citing growing adoption of AMD's MI series GPUs and international tailwinds. Despite a heightened EV-to-EBITDA multiple of 36.8x, CFV raises their rating to Strong Buy, citing robust financials and renewed China access.

Advanced Micro Devices (AMD) stock has surged 7.35% over the past week, driven by a series of positive developments, including the lifting of the AI chip export ban to China. This move has reignited investor interest and optimism in the company's growth prospects.

The lifting of the AI chip export ban to China has been a significant catalyst for AMD's stock performance. This move allows AMD to resume shipments of its MI308X chips to China, which is expected to provide a substantial boost to the company's revenue. Analysts have responded positively, with several upgrading their price targets for AMD. Bank of America Securities and Mizuho Securities have both raised their targets to $175 [1].

The anticipation surrounding AMD’s upcoming earnings report has also contributed to the stock's upward movement. Despite the recent rally, some analysts remain cautious, noting potential risks such as the possibility of the chip ban being reinstated. However, the overall sentiment remains positive, with a consensus rating of 'Moderate Buy' among analysts [1].

Evercore, an investment research firm, predicts AMD's revenue will increase by $700 million and potentially $1.5 billion in 2025 after the US Commerce Department lifted its ban on AMD's MI308X chip shipments to China. The firm believes this will boost the company's profitability and gross margins [2].

BofA Securities raised its price target on AMD to $175 from $130 while maintaining a Buy rating, citing stronger-than-expected data center GPU prospects. The semiconductor giant projects it can ship $400-$600 million quarterly in data center GPUs during the second half of 2025 and throughout 2026 [3].

The lifting of the ban on AI chip sales to China is a significant development for both AMD and Nvidia. For AMD, it represents a potential recovery of substantial revenue that was previously at risk due to government restrictions. For Nvidia, it marks a reversal of its loss of market share in China, which had declined from 95% to 50% due to the ban [4].

This policy shift comes as relations between the world's top two economies continue to improve. The lifting of the ban on AI chip sales is part of a broader thawing of relations between the U.S. and China, which has also seen the U.S. lift a spate of export controls on chip design software in recent weeks [4].

References:
[1] https://www.tipranks.com/news/weekend-updates/amd-stock-surges-amid-ai-chip-export-boost
[2] https://www.ainvest.com/news/evercore-sees-1-5b-revenue-gain-amd-trump-lifts-china-ai-chip-ban-2507/
[3] https://www.investing.com/news/analyst-ratings/amd-stock-price-target-raised-to-175-from-130-at-bofa-on-ai-growth-93CH-4136327
[4] https://finance.yahoo.com/news/what-the-china-export-easing-means-for-nvidia-amd-and-other-chips-stocks-135640925.html