To The Moon

Advanced Micro Devices ( $Advanced Micro Devices(AMD)$ ) is back in the spotlight, surging 6% to $185.50 after announcing it will resume sales of its MI308 AI chips to China following U.S. government approval. This move, mirroring Nvidia’s recent China sales greenlight, could unlock billions in revenue for AMD, making it a prime pick for investors who missed Nvidia’s meteoric rise to a $4 trillion market cap. With the semiconductor sector riding a wave of AI and automotive demand, the question is: Is AMD still a buy, and which other stocks in AI, auto, and China’s chip market offer the best upside? This report dives into AMD’s rally, its growth potential, and top alternatives in AI, auto, and China’s chip sector, with strategic investment approaches to seize this opportunity while managing risks.

AMD’s China Catalyst: A Game-Changer

AMD’s announcement on July 15, 2025, to restart MI308 chip sales to China, following U.S. Commerce Department approval, has ignited investor enthusiasm. The MI308, part of AMD’s MI300 series, is a high-performance AI accelerator designed to compete with Nvidia’s H200 and Blackwell chips. China, representing ~20% of AMD’s revenue before 2025 export restrictions, is a critical market, and resuming sales could add $2-$3 billion annually, per analyst estimates, offsetting an $800 million hit from earlier bans.

• Market Impact: The 6% stock surge reflects optimism, with X users calling it “AMD’s China rebound” and predicting a run to $200. The move follows Nvidia’s approval to resume H20 sales, signaling a U.S. policy shift amid improving U.S.-China relations.

• AI Chip Strength: AMD’s MI308 boasts up to 32% higher performance in certain AI workloads compared to Nvidia’s H100, with double the memory and greater bandwidth, per company claims. Its adoption in data centers and supercomputers, like the El Capitan exascale system, bolsters its AI credentials.

• Financial Boost: Q1 2025 data center revenue grew 30% to $2.3 billion, with analysts expecting Q2 revenue (August 5, 2025) to hit $6.7 billion, up 15% year-over-year, driven by MI308 and Instinct accelerators.

Social media sentiment on X is bullish, with posts like “AMD’s MI308 is Nvidia’s nightmare—$200 by Q4!” but some warn of “empty calories” if competition or tariffs derail growth.

Is AMD Still a Buy?

Financial Snapshot

• Current Price: $185.50, up 55% YTD but down 19.65% from its March 2024 high of $227.30.

• Valuation: Forward P/E of 25x, reasonable compared to Nvidia’s 32x, with a 2.5% dividend yield. Revenue in 2024 grew 13.69% to $25.79 billion, with earnings up 92.15% to $1.64 billion.

• Analyst Ratings: Consensus “Buy” from 38 analysts, with an average price target of $146.26 (6% downside), but higher targets like Morgan Stanley’s $200 and Goldman Sachs’ $195 suggest 8-13% upside. Mizuho raised its target to $175 from $152, citing AI momentum.

• Q2 Earnings (August 5, 2025): Expected EPS of $0.93 (up 50.6% YoY), with revenue forecasts at $6.7 billion. AMD beat EPS estimates 75% of the time in the past year, per TipRanks.

Technical Analysis

• Support/Resistance: Support at $170-$180 (50-day moving average) has held firm, with resistance at $190-$200. A breakout above $190 could target $200-$210; a drop below $170 might test $150-$160.

• Momentum: RSI at 65 indicates room for upside before overbought conditions (above 70). Trading volume spiked to 70 million shares post-China news, signaling strong interest.

• Volatility: Beta of 1.68 suggests higher volatility than the S&P 500, amplified by tariff and competition risks.

Bull Case

• China Revenue: Resuming MI308 sales could add $2-$3 billion annually, boosting data center revenue by 20-30%, per analyst estimates.

• AI Growth: The $563 billion AI datacenter market by 2028, per Citi, supports AMD’s MI308 and Instinct accelerators, with 30% Q1 data center growth.

• Diversified Portfolio: AMD’s Ryzen CPUs, Radeon GPUs, and embedded chips for gaming and automotive provide a buffer against AI market swings.

Bear Case

• Competition: Nvidia’s 90%+ AI chip market share and CUDA platform pose challenges, while Intel’s Gaudi 3 and hyperscaler custom chips (e.g., Google’s Axion) threaten margins.

• Tariff Risks: Trump’s tariffs (30% on EU/Mexico, 35% on Canada, effective August 1) could disrupt supply chains, impacting AMD’s global clients.

• Valuation Concerns: At 25x P/E, AMD’s premium valuation leaves little room for error if Q2 earnings or guidance disappoint.

AMD’s China sales restart and AI momentum make it a compelling buy for those who missed Nvidia, but risks require careful timing.

Top Picks in AI, Auto, and China Chips

For investors seeking alternatives or complements to AMD, here are top stocks in AI, auto, and China’s chip sector:

AI Sector

• Taiwan Semiconductor Manufacturing ( $Taiwan Semiconductor Manufacturing(TSM)$ ): The world’s largest chip foundry, TSMC reported a Q2 2025 earnings beat with $20.8 billion in revenue (up 39% YoY) and raised its full-year guidance to $86.2 billion. Trading at $185.50 with a 25x P/E, it’s a must-own for AI chip exposure, with analysts targeting $200-$210.

• ASML Holding ( $ASML Holding NV(ASML)$ ): A leader in semiconductor equipment, ASML reported Q1 2025 net sales of €7.7 billion and net income of €2.4 billion, with 2025 guidance of €30-35 billion. Trading at $950, it targets $1,100, driven by demand for EUV lithography systems critical for AI chips.

Auto Sector (China Focus)

• BYD ( $BYD Co., Ltd.(BYDDY)$ ): China’s top EV maker, BYD is up 30% YTD to ~$60, with strong growth in domestic and international markets. Its integration of AI for autonomous driving and battery tech makes it a dual AI-auto play, targeting $80.

• NIO ( $NIO Inc.(NIO)$ ): A premium Chinese EV maker, NIO is up 25% YTD to $5.50, with expansion in Europe and AI-driven features. Targets $7, with support at $5.

Chips in China

• Semiconductor Manufacturing International Corporation (SMIC): China’s largest chipmaker, SMIC faces U.S. sanctions but benefits from domestic demand. Trading at HK$17, it’s a riskier bet with a $20 target.

• Hua Hong Semiconductor (HHUSF): A smaller player focusing on mature nodes, Hua Hong is less impacted by sanctions. Trading at $2.50, it targets $3.50.

My Top Picks

I’m most bullish on AMD for its AI chip momentum and China sales restart, TSMC for its foundry dominance, and BYD for its EV and AI integration. AMD and TSMC offer direct exposure to the AI boom, while BYD combines auto and tech growth in China’s massive market.

Trading and Investment Strategies

Short-Term Plays

• Buy AMD on Dip: Enter at $170-$180, target $200-$210, stop at $165. An 11-18% gain if Q2 earnings (August 5, 2025) beat expectations.

• Buy TSMC on Dip: Grab at $170-$180, target $200-$210, stop at $165. An 11-18% gain on AI demand.

• Options Straddle: Buy $185.50 calls/puts on AMD or $185.50 calls/puts on TSMC for earnings volatility.

Long-Term Investments

• Hold AMD: Buy at $170-$180, target $220-$250 over 12 months, for 22-39% upside with AI and China growth.

• Hold TSMC: Buy at $170-$180, target $220-$250, for 22-39% upside with foundry dominance.

• Hold BYD: Buy at $60-$65, target $80-$90, for 23-38% upside with EV and AI growth.

Hedge Strategies

• VIXY ETF: Buy at $15, target $18, stop at $13, to hedge against tariff or earnings volatility.

• SPY ETF Puts: Use puts at $614 to protect against a 5-10% S&P 500 pullback.

• Gold ETF (GLD): Buy at $200, target $220, stop at $190, as a safe-haven hedge.

My Trading Plan

I’m cautiously bullish on AMD, seeing $200-$210 as achievable by year-end 2025, driven by MI308 sales and AI momentum. I’ll buy AMD at $170-$180, targeting $200-$210, with a $165 stop, and TSMC at $170-$180, targeting $200-$210, with a $165 stop, for diversified chip exposure. For auto exposure, I’ll add BYD at $60-$65, targeting $80, with a $55 stop. I’m hedging with VIXY at $15, targeting $18, and keeping 20% cash to seize dips if tariffs (e.g., U.S.-China trade tensions) or geopolitical tensions (Israel-Iran conflict) shake markets. I’ll monitor AMD’s Q2 earnings (August 5), tariff negotiations, and AI spending trends for cues.

The Bigger Picture

AMD’s 6% surge to $185.50, driven by resumed MI308 sales to China, positions it as a compelling alternative for investors who missed Nvidia’s rally. With a 25x P/E, 55% YTD gain, and strong AI chip demand, AMD could hit $200-$210 by year-end if Q2 earnings beat expectations. TSMC and ASML offer robust semiconductor exposure, while BYD and NIO tap into China’s EV and AI-driven auto market. However, tariff risks (30% on EU/Mexico, 35% on Canada), competition from Nvidia and Intel, and geopolitical tensions (Israel-Iran conflict, oil at $75 per barrel) could trigger volatility, with a potential 5-10% S&P 500 pullback to 5,800-6,000. Investors should buy on dips for long-term upside, use options for volatility plays, and hedge with VIXY or GLD to manage risks. The AI and auto chip boom is alive—pick your winners and trade smart.

Which stock are you most bullish on—AMD, TSMC, or BYD? Are you buying or hedging? Share your strategy below! 🎁

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