AMD Set for Growth as US-China Trade Eases and AI Investment Surges—Time to Buy?

Advanced Micro Devices (AMD) has captured investor attention with a sharp rally driven by favourable geopolitical shifts and strong industry momentum. A recent policy reversal by the US government, allowing Nvidia to export AI chips to China, has sparked optimism for similar approvals for AMD. Combined with AMD’s expanding role in AI, strong financial growth, and bullish technical signals, the stock now presents a compelling opportunity for long-term investors. This article examines the key catalysts, financial performance, market positioning, and technical outlook that underpin AMD’s sustained bullish momentum.

AMD Stock Surges on Positive Geopolitical Shift and Nvidia’s China Breakthrough

AMD stock surged following major news involving its top competitor, Nvidia Corp (NVDA). Investors cheered after the US government granted Nvidia licenses to sell its H20 AI chips to China. This decision came despite earlier restrictions imposed in April. The surprise reversal in policy signalled a shift in US-China relations regarding tech trade. As Nvidia benefits from this breakthrough, investors anticipate similar outcomes for AMD.

The potential for AMD to gain export approval for its AI processors could unlock a valuable revenue stream. The company has already designed chips specifically to meet export criteria. If AMD receives the green light, it will gain access to a large and strategically important market. This development would boost short-term sales and long-term growth prospects.

The news also suggests a broader thaw in US-China trade tensions. A possible improvement in bilateral relations could benefit AMD beyond AI chip exports. Lower geopolitical risk would ease investor concerns and support a higher valuation. Combined with rising demand for AI hardware, these developments form a powerful catalyst for continued upside in AMD’s stock price.

Major AI players are utilising AMD GPUs for their daily inference tasks. Cloud providers rely on AMD chips for search and generative AI functions. Its ROCm platform is competitive for inference, even if CUDA still leads in training. AMD also leads in data centre CPUs, a crucial component of AI infrastructure. As AI workloads continue to grow, demand for high-performance CPUs will also increase. The UALink Consortium aims to break Nvidia’s interconnect monopoly. This could level the playing field and boost AMD’s adoption. With AI inference projected to surpass training, AMD stands to benefit greatly.

AMD Financial Performance

AMD reported strong revenue growth after 2020, as shown in the chart below. It was found that Q1 2025 revenue was $7.438 billion, representing a 36% year-over-year increase. Moreover, the yearly revenue was $25.79 billion. The strong surge in revenue growth over the past five years indicates strong financial performance for AMD.

Despite generating strong revenue, the company also generates substantial profits, as evidenced by its robust net income. The net income for Q1 2025 was $709 million, with a yearly net income of $1.641 billion.

Moreover, the gross margin reached 50%, while the non-GAAP gross margin was 54%. The chart below shows that the operating income was also strong at $806 million. These results reflect strong execution and momentum across AMD’s core businesses.

Data Centre and AI Segments Drive AMD’s Next Phase of Expansion

The strong growth for AMD was primarily driven by the robust performance of the Data Centre segment, which generated $3.7 billion in revenue. This revenue was up 57% from last year. Strong sales of AMD EPYC CPUs and Instinct GPUs drove this surge in data centre revenue.

Meanwhile, the Client and Gaming segment generated $2.9 billion in revenue, reflecting a 28% increase compared to the same period last year. AMD’s Embedded segment generated $823 million, representing a 3% year-over-year decline. Demand in embedded markets remained mixed. Despite this slight decline, AMD continued to expand its embedded portfolio. The company introduced new EPYC Embedded 9005 Series processors and Versal AI Edge SoCs.

The chart below shows that the Data Centre Segment accounts for 49.4% of total revenue in Q1 2025. On the other hand, the client and gaming segment account for 39.5% of total revenue, and the Embedded Segment accounts for 11.1%.

AMD also made strategic moves to strengthen its position in the AI sector. It closed the acquisition of ZT Systems to target the $500 billion data centre AI accelerator market. AMD strengthened its partnerships to support frontier AI models and enhance inference performance. Core42, Dell, and CEA France announced large-scale deployments of AMD Instinct GPUs.

This strong financial performance gives AMD the scale and momentum needed to compete with top-tier rivals, such as Nvidia and Intel Corp (INTC). The chart shows AMD’s forward PE ratio rebounding to 39.61. Despite this strong recovery in valuation, AMD still trades within its historical range, reflecting investor confidence in its long-term growth potential.

A Deep Dive into the Technical Performance of AMD

Understanding the Buy Spots in AMD during Heavy Volatility

The stock price of AMD is showing strong bullish price action over the past 25 years. The monthly chart for AMD shows that the price formed a strong base from 2000 to 2020. This strong base is represented by a cup pattern, where the price broke above the $45 area in March 2020. This breakout from the $45 level pushed the price to a high of $160 in November 2021.

A correction followed, forming a bottom in October 2022. This strong surge in prices, followed by the October 2022 bottom, created an ascending broadening wedge pattern, which indicates strong price volatility. AMD’s price correction in October 2022 acted as a retracement back toward the breakout level of the cup pattern. This initiated the first strong technical buy signal of the century, pushing AMD’s stock to record levels above $200.

After hitting resistance at the top of the ascending broadening wedge, the stock corrected lower toward the wedge’s support and formed a bottom in April 2025. The second buy signal developed in April, as the stock recovered sharply and formed a strong wick in the April 2025 monthly candle. Following this candle, June and July exhibited strong bullish momentum, as seen in the monthly chart.

The emergence of the ascending broadening wedge shows strong price volatility. However, this volatility is likely to continue pushing prices higher due to the persistent bullish price action and solid patterns formed over the past 20 years. Based on the two buy signals that emerged in 2022 and 2025, and with the ongoing AI boom, AMD’s stock may continue to rise toward the $300 area in the coming years.

Key Action for Investors

As discussed above, the stock price shows strong bullish momentum. However, since the price is currently at higher levels, it isn’t easy to pinpoint an ideal entry point for new investors. The ascending broadening wedge pattern is also visible on the weekly chart below, which reveals a cup and handle formation within the wedge.

The recent recovery from the April 2025 bottom shows a V-shaped rebound, with the price now heading toward the $170 area. Despite strong fluctuations within a broad range of $80 to $200, the pattern suggests that the price will likely continue to rise.

The V-shaped recovery signals strong bullish momentum, offering investors the opportunity to buy in anticipation of higher prices. Any short-term corrections in AMD stock should be considered a potential buying opportunity.

Short Term Price Development for AMD

The daily chart for AMD also shows that the price has broken above the 200-day SMA. Following this breakout, the price rallied above the $150 area. Now, the 50-day SMA is converging above the 200-day SMA, indicating strong bullish momentum. The formation of an inverted head and shoulders pattern during this V-shaped recovery further supports the bullish outlook.

The stock price is likely to continue rising toward the $173 and $187 levels in the near term. However, any pullback toward the $125 area, aligned with the 200-day SMA, should be viewed as a strong buying opportunity for short-term and long-term investors. This correction may occur as the RSI is currently in the overbought zone, suggesting the potential for a short-term pullback.

Market Risks

Despite AMD’s strong momentum, several market risks could limit upside for AMD. First, geopolitical tensions remain a key concern, particularly regarding US-China trade policies. Any reversal in export license approvals could hurt AMD’s AI chip sales. Moreover, regulatory changes or sanctions may impact cross-border semiconductor supply chains. The company also faces rising competition from Nvidia, Intel, and new AI-focused startups.

On the other hand, macroeconomic factors also pose risks. High inflation, uncertain interest rates, and a broader market correction could reduce investor appetite for tech stocks. Valuation concerns may emerge if earnings fail to keep pace with growth expectations. Additionally, AMD’s heavy reliance on the data centre and AI segments increases its exposure to demand shifts. Any delay in AI adoption or slowdown in cloud infrastructure spending could pressure future revenues.

From a technical perspective, AMD shows strong volatility within the ascending broadening wedge. This heightened volatility increases the risk of sharp price movements. A break below the $80 will negate the bullish price action and initiate further downside towards $40.

Final Words

AMD is well-positioned for long-term growth. The above discussion, including financial performance, expanding AI partnerships, and rising demand for high-performance chips, provides a solid foundation. Moreover, the company’s ability to challenge Nvidia and gain market share in AI and data centres further strengthens its bullish case.

From a technical perspective, the price has strong potential to rise following the latest buy signal that emerged in April 2025. Due to short-term overbought conditions, any pullback toward the $125 level should be seen as a strong buying opportunity for long-term investors.