Since mid-June, AMD (Advanced Micro Devices) has seen its stock price skyrocket by over 60%, becoming a major market focus. This rally is not only driven by the AI boom but also supported by several strong fundamentals. Numerous analysts have raised their price targets, pushing market expectations to new highs.
However, with the earnings report set to be released on August 5, concerns are emerging: Has this rally already priced in all the good news? And how significant is the risk of a pullback?
Before the earnings announcement, it’s worth reviewing the key drivers behind AMD’s latest surge:
1. Backed by AI Giants
At AMD Advancing AI event in June, AMD unveiled its new Instinct MI350 Series accelerators, including the MI350X and MI355X. These next-generation chips offer significant improvements in speed, efficiency, and scalability over previous versions.
AMD also announced that global tech powerhouses such as Meta, OpenAI, Microsoft, and Tesla are already using its accelerators. More notably, AMD is partnering with Oracle to deploy over 130,000 MI355X chips in building its newest OCI Compute Supercluster. These developments not only highlight AMD’s product strength but also show it is gaining real traction among leading AI companies.
2. AI Chip Price Hike
There are reports that AMD has raised the price of its MI350 series chips from $15,000 to $25,000—a nearly 70% increase. While not officially confirmed, analysts see this as a sign of strong market confidence and AMD’s growing pricing power.
Even after the price increase, AMD’s MI350 series remains cheaper than NVIDIA’s Blackwell B200 chips (priced around $30,000 to $40,000). With performance said to be catching up fast—and given NVIDIA’s supply shortages and long wait times—AMD is in a strong position to gain market share.
Investor confidence has surged in response. HSBC, for instance, raised its forecast for AMD’s 2025 AI chip revenue from $9.6 billion to $15.1 billion—underscoring the company’s strong growth potential.
3. Export Restrictions Lifted
Earlier this year, the U.S. government imposed restrictions on AI chip exports to China due to national security concerns, forcing AMD to take an $800 million write-down on its MI308 inventory. However, the ban was unexpectedly relaxed recently, which the market welcomed as a positive sign—raising hopes that AMD could now clear some of that inventory. The stock rose about 6% on the news.
While uncertainties remain around how much of that inventory can be cleared, many investors believe it could help boost AMD’s short-term profitability and provide further support for the stock.
According to analysts at Bank of America, if AMD resumes AI chip exports to China in 2025, related revenue could exceed expectations by $700 million to $1 billion. By 2026, that figure could reach $1.5 billion to $2 billion.
4. Stability in CPU Business
In the server CPU market, AMD’s market share has climbed to nearly one-third, while Intel’s share has dropped to 63%. Some research firms forecast AMD’s share could rise to 36% by 2026, with more optimistic projections suggesting it could reach as high as 60%.
On the client-side CPU, consumer demand is recovering, and tariff policies are supporting increased purchasing. AMD continues to gain ground against Intel. Meanwhile, ARM-based CPUs are emerging fast, breaking into double-digit market share (11.9%) for the first time—posing challenges to both AMD and Intel.
The CPU space will be a key battleground for AMD to maintain its foundation and expand further.
Earnings Ahead: Is the Good News Already Priced In?
Market consensus expects AMD to report around $5.7 billion in revenue for the quarter ending August 5—a year-over-year increase of about 6%. The focus will be on AI-related data center revenue, especially whether the MI300 series can deliver a meaningful upside.
If the numbers are strong, it could trigger another wave of upward revisions and price momentum.
However, with the stock already reflecting very optimistic expectations, any earnings miss or underwhelming AI revenue could trigger a “buy the rumor, sell the news” reaction—leading to a short-term correction.
Conclusion: Sustaining Gains May Be Challenging
From the launch of the MI350 series and chip price hikes to changes in export policy, solid CPU fundamentals, and anticipation around upcoming earnings—these combined factors have fueled a well-supported, multi-pronged rally for AMD.
Whether the stock can continue climbing depends on:
- Whether earnings exceed expectations
- Real shipment figures for the MI350 series
- Continued CPU market share expansion
- Sustained AI-related investments across the industry
Over the medium to long term, AMD shows strong fundamentals and unique growth potential driven by synergy between its CPU and AI chip businesses. However, for short-term traders, volatility around the earnings release is a risk to watch.
At the end of the day, holding onto gains is often tougher than hitting new highs.
