The U.S. government and President Donald Trump imposed 25% tariffs on semiconductor equipment, targeting AMD’s MI325X and Nvidia’s H200 chips to boost local manufacturing and reduce reliance on foreign vendors.

Certain entities like startups, domestic data centers, and chips for local manufacturing are exempt from the tariffs, while Nvidia is allowed to export H200 chips to China despite recent restrictions from Chinese authorities.

AMD, a leading semiconductor company in Santa Clara, California, has seen its stock almost double in the last year, outperforming the iShares Semiconductor ETF due to factors like the OpenAI deal and surging AI spending.

AMD’s forward P/E ratio of 41 times is high but in line with historical averages, making the stock appear discounted based on metrics like forward P/B and expected earnings growth of 77% in 2026, especially in the AI space.

After reporting strong third-quarter earnings above expectations, AMD’s CEO Lisa Su expressed confidence in the supply chain’s outlook, with a strong ramp crucial for success despite U.S. export restrictions having minimal impact on the company.

Wall Street analysts are bullish on AMD stock, with 30 “Strong Buy” ratings out of 45 analysts, offering a consensus “Moderate Buy” rating and a mean target price of $284.66, indicating a 23% potential upside from current levels in anticipation of AI dominating the investing landscape in 2026.

Read more at Yahoo Finance: As Trump Hits AMD MI325X Chips with a 25% Tariff, How Should You Play AMD Stock?