AMD Stock Surges 5%, Outshines Nvidia in AI Chip Race

Advanced Micro Devices (AMD) shares rallied more than 5% in Thursday's session, outpacing sector rival Nvidia (NVDA) as analysts digest the implications of its new China export compromise. The chipmaker's concession to allocate 15% of its AI GPU sales to the U.S. government has drawn mixed reactions, but bulls argue the impact is marginal compared to its growth trajectory.

Citi's Christopher Danely notes the affected MI308X chips represent low-margin products, leaving AMD's premium MI355 and MI400 series—projected to drive $6.2B in 2025 AI sales—untouched. The upcoming MI400 lineup, featuring rack-scale 72-processor servers, could finally pose a credible challenge to Nvidia's AI dominance.

While maintaining a neutral $180 price target, Danely emphasizes AMD's 54% corporate margins remain insulated from the China deal. The stock now hovers NEAR 52-week highs as investors bet on its underdog potential in the $9.9B 2026 AI chip forecast.