Aug 13 – Advanced Micro Devices (NASDAQ:AMD) grabbed attention this week after reports revealed the chipmaker agreed to give the U.S. government 15% of its AI GPU sales in China in exchange for export licenses. While that sounds like a big deal, Citi analyst Christopher Danely says it’s largely immaterial to AMD’s bottom line.
Danely points out that the agreement mainly impacts low-margin products like the MI308X, far less profitable than AMD’s corporate average margin of nearly 54%. Instead, the real growth drivers remain AMD’s mainstream AI GPUs, the MI355 and MI400, which are fueling AI sales forecasts of $6.2 billion in 2025 (up 23%) and $9.9 billion in 2026 (up 58%). Key customers fueling that growth include Amazon (NASDAQ:AMZN), Oracle (NYSE:ORCL), Meta Platforms (NASDAQ:META), and OpenAI.
The analyst kept a Neutral rating on AMD with a $180 price target, noting the stock trades at a valuation slightly above its historical average. Rival Nvidia (NASDAQ:NVDA) has also signed a similar China export deal. For now, Wall Street maintains a Moderate Buy rating on AMD, with analysts seeing around 5% upside potential from current levels.
This article first appeared on GuruFocus.
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