Advanced Micro Devices (AMD) has experienced notable growth during 2025, with stock gains reaching 78% year to date prior to a recent pullback. Despite this strong performance, the share price declined by 19% from a 52-week high at the end of October, suggesting some investors are realizing profits.
This decline may present an advantageous entry point for investors interested in a rapidly expanding semiconductor firm capitalizing on the rising adoption of artificial intelligence (AI) technologies. A pivotal development influencing AMD’s outlook is a directive from President Donald Trump permitting companies such as Nvidia, AMD, and Intel to resume sales of advanced AI chips to Chinese customers, potentially bolstering revenues in 2026.
Looking back at 2025, AMD projected revenues of approximately $34 billion, marking a 31% increase over the previous year’s $25.8 billion. Growth was hindered during the year by an inability to export high-end AI data center chips to China due to export controls introduced by the Trump administration in April. These restrictions resulted in an $800 million inventory charge recorded in the second quarter and a loss of significant business from a market that previously accounted for nearly a quarter of AMD’s total revenue.
Analyst projections anticipate AMD’s earnings per share to reach $3.97 in 2025, representing a 20% increase. Expectations for 2026 are even more optimistic, with consensus forecasts suggesting a 62% rise to $6.46 per share. Given the potentially expanded market access, the company may exceed these targets.
This optimism stems partly from analogous developments involving competitor Nvidia. The Trump administration’s recent allowance for Nvidia to sell its advanced H200 chips to China, replacing lower-powered variants previously permitted under export rules, anticipates a considerable revenue boost even after applying a 25% export tax. President Trump indicated that similar terms would apply to AMD, opening the possibility for the semiconductor company to sell its higher-performance chips rather than the downgraded MI308 models currently offered to Chinese customers.
If AMD capitalizes on the ability to export full-featured data center graphics processing units to China with the attendant premium over lesser chip versions, the revenue impact could be notable despite the imposed export fees. This could facilitate a substantial recovery of lost business and acceleration of top-line growth.
Forecasts for 2026 project AMD’s revenue increasing by 31% to $44.6 billion. However, if revenue from China returns to the 2024 level of approximately $6.2 billion, total revenue for 2026 may approach $51 billion. It is significant that current analyst revenue estimates may not fully factor in the impact of the export control relaxation.
Applying AMD’s current price-to-sales ratio of 11 to a potential $51 billion revenue suggests a market capitalization near $561 billion, implying a 60% upside from present valuation levels. The recent decline in AMD’s stock price could therefore represent a timely opportunity for investors to gain exposure ahead of this anticipated growth trajectory in the semiconductor sector.