U.S. Policy Shift on AI Chip Exports to China Could Propel AMD’s Revenue

AMD US0079031078

Advanced Micro Devices (AMD) is poised to enter 2026 with a significant potential catalyst. Recent reports indicate the U.S. government is preparing to allow American semiconductor companies to resume sales of advanced artificial intelligence (AI) chips to Chinese customers. This policy reversal could address a substantial revenue shortfall for AMD, estimated at approximately $6 billion, which represents a quarter of the company's total sales. Following a recent pullback, AMD's share price now faces a critical juncture.

Over the weekend, multiple news outlets reported a shift in the Trump administration's stance on semiconductor export controls. The new policy would reportedly permit AMD and its rival Nvidia to supply cutting-edge AI processors to the Chinese market once again. Restrictions imposed earlier in 2025 had severed AMD's access to this crucial growth region, which historically contributed about 25% of corporate revenue.

Market researcher Harsh Chauhan notes that Wall Street has yet to fully price in this potential market reopening. Current financial projections for 2026 are still based on a scenario excluding Chinese business. Should export licenses be formally granted, a substantial upward revision to earnings estimates would likely be required.

Financial Implications and Market Valuation

Analysts currently forecast AMD's total revenue for 2025 to reach around $34 billion, marking growth of more than 30% year-over-year. With restored access to China, however, 2026 revenue could potentially surge to $51 billion. Such an increase might drive the company's market capitalization up by as much as 60%, significantly above its current valuation of roughly $350 billion.

Technical Picture Shows Caution Amid Positive News

Despite the encouraging developments, the equity remains in a corrective phase. Since its October peak at $267, the stock has declined nearly 20%. A key support level is now seen around the $215 mark. Strategists at Forex.com have highlighted reversal risks for mega-cap technology stocks, even as the broader Nasdaq 100 index holds steady.

A sustained breakout above $220 would signal a potential trend reversal for the shares. Conversely, a drop below $215 could trigger further selling pressure toward the next support zone.

The Competitive Landscape Ahead

As the new year approaches, the focus turns to whether AMD can convert this regained Chinese opportunity into tangible market share. Competition with both Nvidia and Intel is expected to intensify in 2026, as the reported export easing would apply to all U.S. chipmakers. The first half of the coming year will reveal if the stock can resume its path toward retesting its previous high of $267.