A recent policy shift by the Trump administration has opened the door for Advanced Micro Devices (AMD) to potentially tap into a lucrative revenue source, particularly in the rapidly growing artificial intelligence (AI) sector. In 2025, AMD’s stock has already experienced remarkable growth, increasing by 78% so far this year. However, recent trading trends indicate that some investors are cashing in their profits, as the stock has observed a 19% decline since its peak on October 29.
This price adjustment may present a strategic buying opportunity for investors seeking to capitalize on a fast-growing company poised to benefit from the ongoing AI revolution. The administration’s decision to permit sales of advanced AI chips to Chinese customers, which includes AMD alongside competitors like Nvidia and Intel, is expected to provide a significant boost for AMD’s performance in 2026.
Financial projections show that AMD’s revenue is on track to reach $34 billion for 2025, a 31% increase from the previous year. However, the company faced challenges when it was restricted from selling chips to China following the imposition of export controls in April 2025, which hampered its broader business opportunities. The lost access to the Chinese market has been costly; AMD recorded an $800 million inventory charge in the second quarter and saw a considerable decline in revenue, as China constituted nearly 25% of its 2024 revenue.
Despite this setback, analysts predict an impressive 20% growth in AMD’s earnings for 2025, estimating an earnings per share of $3.97. The outlook for 2026 is even more optimistic, with predictions suggesting earnings could soar by 62%, reaching $6.46 per share. Comparisons with Nvidia illustrate the potential for AMD’s recovery. Nvidia is now allowed to sell its high-end H200 chips in China after previously being limited to lower-tier models. With similar permissions likely extended to AMD, the company could soon retail its more advanced processors in the Chinese market.
Previously, AMD had been limited to selling the downgraded MI308 chips in the region, but now it is positioned to offer its premium products—potentially reversing the losses incurred due to export restrictions. Analysts are optimistic that this restored access could lead to substantial revenue growth in 2026, even with the proposed 25% export tax on sales to China.
Looking forward, projections estimate AMD’s revenue could rise by 31% in 2026, reaching approximately $44.6 billion. If revenue from China returns to 2024 levels, around $6.2 billion, the total revenue could push past $51 billion. Notably, this forecast does not yet account for the newly lifted restrictions on exports to China, indicating that analysts may have underestimated the company’s potential.
Should AMD achieve the anticipated $51 billion in revenue and maintain its price-to-sales ratio, its market capitalization could spike significantly, potentially increasing by 60% from current levels. In light of the recent stock pullback, this may be an opportune moment for investors to consider AMD as a compelling investment with strong growth prospects heading into the new year.
