A Major China Order Could Revitalize AMD’s Stock Trajectory

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After a challenging month of downward pressure, Advanced Micro Devices (AMD) may be on the verge of a significant catalyst. Industry reports suggest the semiconductor designer is nearing an agreement with Chinese tech titan Alibaba for a substantial order of artificial intelligence (AI) chips. This potential deal raises questions about AMD's capacity to accelerate its competitive stance against Nvidia within the world's second-largest economy.

Despite recent share price weakness, AMD's underlying business remains strong. The data center segment, now representing 46% of total revenue, achieved record quarterly sales of $4.3 billion in Q3 2025, marking a 22% year-over-year increase. Strategic collaborations with industry leaders like OpenAI, Meta, and Microsoft continue to provide a stable foundation for demand. This core strength persists even as AMD's stock declined by nearly 14% over the past month, a movement that has not shaken Wall Street's broader confidence.

The Alibaba Speculation: Details and Implications

At the heart of the recent speculation is AMD's MI308 AI accelerator. According to emerging reports, Alibaba is evaluating a purchase of 40,000 to 50,000 units of this specific chip. The MI308 was engineered to comply with stringent U.S. export controls while still delivering the necessary computational power for demanding AI training workloads. For AMD, securing this deal would represent a major strategic advance. The company has already obtained certain export licenses and is prepared to remit a 15% fee to the U.S. government on approved sales to Chinese entities. Interest is reportedly not limited to Alibaba, with other major Chinese cloud providers also showing curiosity in AMD's hardware offerings.

Analyst Sentiment and Price Targets Remain Elevated

Market experts have maintained a bullish outlook despite the stock's recent performance. The consensus price target among analysts sits approximately 39% above current trading levels. Research firms including Daiwa, Cantor Fitzgerald, and Bank of America have recently reaffirmed their Buy ratings, with targets clustering around the $300 mark. Analysts at Bank of America emphasized that the year 2026 merely represents the midpoint of a long-term AI infrastructure investment cycle, even as investors scrutinize the returns on current expenditures more critically.

Potential for a Guidance Surprise

A confirmed Alibaba order, valued in the hundreds of millions of dollars, could directly impact AMD's financial forecasts. The company's current revenue guidance incorporates only minimal contributions from the Chinese market. Consequently, a deal of this magnitude would necessitate an upward revision to annual targets. It would stand as one of AMD's largest single transactions in China since the implementation of U.S. export restrictions and would serve to validate the MI308 as a credible alternative to Nvidia's solutions. The competitive landscape is set to intensify, however, as Nvidia also prepares to begin shipments of its specialized H200 modules to China as early as February.

For investors, much hinges on the official confirmation of the discussed arrangement with Alibaba. Should this substantial order materialize, it may provide the necessary impetus to reverse the recent share price trend and narrow the gap toward the optimistic targets set by Wall Street.