AMD Shares Gain on Speculation of Major Chinese Order

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Market sentiment around Advanced Micro Devices (AMD) has turned notably bullish as the year draws to a close, fueled by reports of a potential landmark deal. Speculation is mounting that Chinese technology conglomerate Alibaba Group Holding is considering a substantial purchase of AMD's latest artificial intelligence accelerator chips, providing a possible new catalyst for growth. After a period of consolidation following a strong rally, analysts are pointing to significant upside potential for the stock heading into 2026.

The positive outlook is supported by robust financial performance. For the third quarter of 2025, AMD reported record revenue of $9.2 billion, representing a 36% year-over-year increase. A key driver was the Data Center segment, crucial for AI infrastructure, which saw growth exceeding 22%. Currently trading at €181.98, AMD's shares sit approximately 20% below their 52-week high of €227.15. Several market experts view this pullback, given the company's strong fundamentals and product pipeline for 2026, as a potential entry point for investors.

A Strategic Move in the Chinese Market

The recent optimism stems from media reports suggesting Alibaba is evaluating a significant order for tens of thousands of AMD's MI308 accelerator units. If finalized, this agreement would rank among AMD's largest-ever deals within the Chinese market. The development carries strategic weight, as both AMD and its primary rival, Nvidia, are navigating renewed access to China following complex regulatory hurdles throughout 2025. The MI308 accelerators are positioned as a direct alternative to Nvidia's data center GPUs. Market observers interpret Alibaba's potential interest as a strong signal that AMD can capture meaningful market share from Chinese hyperscalers, even while competing with the industry leader.

Wall Street Maintains a Bullish Stance

Despite recent volatility, AMD continues to enjoy broad support on Wall Street. The consensus rating remains "Strong Buy," based on 29 buy recommendations issued over the past three months. The average price target stands near $280, implying considerable upside from current levels. Some analysts are even more bullish. Simon Leopold of Raymond James has set a price target of $377, citing strong growth prospects from AI partnerships with firms like OpenAI and HUMAIN. These deals could reach a volume of up to $15 billion in 2026. Piper Sandler has also affirmed its positive assessment, highlighting the growing traction of AMD's systems.

All eyes are now on February 2, 2026. On this date, AMD is scheduled to release its fourth-quarter results and is expected to provide updates on its AI chip strategy, potentially offering clarity regarding orders from China.