TLDR
- AMD stock surged 21.5% in the past month, outperforming Nvidia’s 14.4% gain as AI stocks rally
- AMD’s Q1 revenue jumped 36% year-over-year to $7.44 billion, with data center business up 57% to $3.7 billion
- Trade tensions threaten AMD as 90-day tariff pause expires July 9, potentially adding up to 50% duties on semiconductor imports
- U.S. export restrictions to China already cost AMD $1.5 billion in expected 2025 revenue plus $800 million one-time charge
- Wall Street maintains Moderate Buy rating with average price target of $132.76, though current stock price already exceeds many targets
AMD stock has been on a tear lately, climbing 21.5% over the past month and leaving Nvidia in the dust with its more modest 14.4% gain. The chipmaker’s recent surge reflects strong earnings momentum and growing AI demand, but looming trade risks could throw a wrench in the works.
The rally comes as recession fears ease and U.S.-China trade tensions cool somewhat. AMD’s stock has gained 15% this year, with most of those gains packed into the last three months.
AMD’s Q1 earnings provided the fuel for this rally. The company posted revenue of $7.44 billion, up 36% year-over-year. That follows increases of about 24% in Q4 2024, 18% in Q3, and 9% in Q2, showing clear acceleration in growth.
The data center business has been AMD’s star performer. Revenue in this segment jumped 57% year-over-year to $3.7 billion. Strong demand for server CPUs, particularly the latest 5th Gen EPYC Turin processors, drove much of this growth.
AMD’s AI push is gaining real traction too. The company saw double-digit growth in its data center AI business during Q1, driven by rising shipments of its MI325X AI accelerators.
Looking ahead, AMD is ramping up production of its next-gen MI350 chip. The company also has the MI400 series in development, planned for a 2026 debut.
Trade Troubles on the Horizon
But here’s where things get interesting. A 90-day pause on broad U.S. tariffs is set to expire on July 9. This could trigger tariffs of up to 50% on semiconductor imports from several nations.
President Trump announced these tariffs back in April but paused them to give countries time to negotiate trade deals. The White House has indicated it doesn’t plan to extend the pause, which could raise import costs for companies like AMD.
AMD is already feeling the pinch from U.S. export restrictions. In April, the government blocked shipments of advanced AI chips to China and certain other regions. The company expects this move to reduce its 2025 revenue by about $1.5 billion, plus an $800 million one-time charge.
Fighting Back Against Restrictions
AMD isn’t sitting idle. The company is working to develop lower-powered chips that comply with U.S. export rules. How well AMD navigates this challenge will determine how much market share it can maintain in China, one of its biggest markets.
The company is also accelerating its AI product roadmap. AMD’s comprehensive AI portfolio spans GPUs, CPUs, software, and full-rack systems, positioning it to compete more effectively with Nvidia.
Despite these challenges, many analysts remain bullish on AMD’s prospects. Mizuho’s Vijay Rakesh maintained a Buy rating on July 2 and raised his price target to $152 from $135.
Rakesh expects better momentum in AMD’s upcoming MI355X chips in the second half of 2025. He also noted that major cloud providers are still looking for alternatives to Nvidia’s AI chips, which could benefit AMD.
Wall Street has a Moderate Buy consensus rating on AMD stock, based on 24 Buys and 10 Holds. The average price target of $132.76 suggests a possible downside of 4.16% from current levels.
AMD currently trades at a forward earnings multiple of 44.8x. Wall Street analysts expect AMD’s earnings per share to grow about 21% in 2025 and accelerate to nearly 54% in 2026.
The 90-day tariff pause expires on July 9, potentially reinstating duties on semiconductor imports that could affect AMD’s cost structure and international growth prospects.
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