The U.S. government and President Donald Trump have announced new tariffs on the import of semiconductor equipment.

The U.S. government and President Donald Trump have announced new tariffs on the import of semiconductor equipment, specifically Advanced Micro Devices’ (AMD) MI325X chips and Nvidia’s (NVDA) H200 chips. The 25% tariffs are expected to encourage local manufacturing of semiconductor equipment and reduce reliance on foreign vendors. The administration has not ruled out future tariffs for the achievement of these objectives. It is worth noting that startups, domestic data centers, the public sector, and chips needed to improve local manufacturing capacity are exempt from these tariffs. At the same time, the government has also allowed Nvidia to export its H200 chips to China. However, just a week ago, Chinese authorities had asked local companies to stop importing H200 chips from Nvidia. It seems China is equally reluctant to use U.S. technology, which raises concerns around both Nvidia and AMD’s China business. About AMD Stock AMD is a leading semiconductor company that designs chips for graphics and high-performance computing solutions. It serves multiple industries, including gaming, personal computing, data centers, and artificial intelligence (AI) workloads. AMD is headquartered in Santa Clara, California. AMD stock has nearly doubled in the last 12 months while the iShares Semiconductor ETF (SOXX) has gained 53% during the same period. A major reason for this outperformance is AMD’s deal with OpenAI, as AI spending continues to surge. AMD’s forward price-to-earnings (P/E) of 41 times is quite high, but that’s how it has always been based on its five-year historic average P/E. The stock's forward price-to-book value of 6.1 times is also trading at an 11% discount to the historic average of 6.85 times. With that in mind, AMD stock is clearly trading at a discount according to various metrics, and these discounts look even prettier when one looks at the company’s expected earnings growth. AMD is expected to grow its EPS by 77% in 2026. This impressive estimated growth rate is part of why the stock enjoys a high forward P/E. AMD is also becoming more and more relevant as we progress toward AI inference and AI on the edge. If AMD CEO Lisa Su’s reputation is anything to go by, the company should continue to enjoy success in the coming years. AMD Comfortably Beats Earnings Estimates AMD announced its third-quarter earnings on Nov. 4 and reported results well above the Wall Street consensus. The company’s net income of $1.24 billion was 61% higher than the same period last year. Going forward, gross margins are also likely to stay strong at just over 54%, which should help translate increasing revenue into healthy net income. On the earnings call, CEO Lisa Su showed confidence in the company’s supply-chain outlook, saying lead times for MI350 and MI400 were between eight and nine months. A strong ramp is crucial to AMD’s success at a time when technology is changing so quickly. Even though the U.S. government’s export restrictions sound negative for the company, a lot of that factor is priced in. The company has already booked a $800 million inventory write-down along with removing China revenue from near-term guidance. Tariffs, therefore, have a minimal impact on AMD stock, as the market is clearly indicating. What Are Analysts Saying About AMD Stock? AMD stock enjoys 30 “Strong Buy” ratings on Wall Street out of the 45 analysts covering shares, securing a consensus “Moderate Buy” rating overall. The mean target price of $284.66 offers 23% potential upside from here on. Analysts are increasingly bullish on AMD stock, as multiple analysts have come forward with positive ratings to kick off the year. AI is expected to again dominate the investing arena in 2026, and AMD enjoys a strong position in the industry.

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