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AMD was getting a nice chunk of its revenue from the Chinese market before the U.S. government’s export controls took effect in April 2025.
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AMD will soon be allowed to sell advanced AI chips to Chinese customers, which should benefit AMD’s business in 2026.
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This could help AMD exceed Wall Street’s growth expectations next year, which could send the stock soaring.
Advanced Micro Devices (NASDAQ: AMD) stock clocked stellar gains in 2025, rising 78% this year as of this writing. However, recent trading suggests that some investors are booking profits. AMD stock is down 19% since hitting a 52-week high on Oct. 29.
This pullback could be a buying opportunity for investors looking to add a fast-growing company that’s benefiting from the adoption of artificial intelligence (AI). Additionally, a recent announcement by President Donald Trump, which will allow companies like Nvidia (NASDAQ: NVDA), AMD, and Intel to sell their advanced AI chips to Chinese customers, is going to give AMD an additional boost in 2026.
Let’s take a closer look at AMD’s catalysts for the new year and see why this stock has the potential to soar once again.
AMD’s business grew at a nice clip in 2025. It is on track to deliver $34 billion in revenue for the year, up 31% over 2024 revenue. It might have been even better, but AMD hasn’t been able to sell its chips into the Chinese market since April, when the Trump administration imposed export controls on sales of advanced AI data center chips to that country.
As a result, AMD incurred an $800 million inventory charge in the second quarter. Moreover, the company lost a significant chunk of its revenue stream thanks to the Trump administration’s move. That’s because China accounted for nearly a quarter of AMD’s 2024 revenue of $25.8 billion, or almost $6.2 billion.
Despite the headwind, analysts expect a 20% increase in the company’s earnings for 2025 to $3.97 per share. Consensus estimates suggest that AMD’s earnings could jump 62% next year to $6.46 per share. I think it could end up doing much better than that.
Take Nvidia, for example. The Trump administration now allows Nvidia to sell its advanced H200 chips to Chinese customers. Nvidia was previously only selling its downsized H20 chips in China to comply with export regulations. Those chips were significantly cheaper and less powerful than Nvidia’s flagship Hopper processor, the H200.
With the change, Nvidia will likely see a significant bump in its revenue next year, even after paying the 25% tax that the administration plans to charge on sales to China. President Trump pointed out in his Truth Social post that the “same approach will apply to AMD,” suggesting that the company may be able to sell its high-end chips to Chinese customers.
It was earlier selling the downgraded MI308 processor to Chinese customers. It may now be able to ship its more powerful chips into that market, just like Nvidia has been allowed to. So, there is a possibility of AMD regaining the lost Chinese revenue in 2026, even with the 25% export fee.
That’s because a full-fledged AMD data center graphics processing unit (GPU) will carry a significant premium over the nerfed MI308. This is why AMD’s sales next year could turn out to be much higher than expected.
Analysts anticipate AMD’s revenue to jump by 31% in 2026 to $44.6 billion. Assuming its revenue from China next year lands at 2024 levels of $6.2 billion, its top line could be somewhere around $51 billion. What’s worth noting is that analysts haven’t adjusted their 2026 revenue expectations for AMD following the Trump administration’s rule change, suggesting that the company’s potential gains from China aren’t baked in just yet.
Assuming AMD does achieve $51 billion in revenue next year and maintains its price-to-sales ratio of 11 at that time, its market cap could jump to $561 billion. That points toward a potential jump of 60% from its current market cap. So, now it would be a good time to buy this semiconductor stock following its recent pullback, as it has the potential to soar impressively in the new year.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia. The Motley Fool has a disclosure policy.
Prediction: AMD Stock Will Jump 60% in 2026, Thanks to President Donald Trump was originally published by The Motley Fool