What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) jumped 5% in the morning session after chip stocks rallied to start the week as investor optimism rose following trade discussions between U.S. and Chinese officials in London.
Semiconductor companies have been among the hardest hit by the dispute, with key technologies subject to export controls. These restrictions have disrupted supply chains, creating uncertainty for both revenue growth and long-term planning.
Following the talks, investor sentiment rebounded on expectations that some of these constraints may soon be lifted. U.S. National Economic Council Director Kevin Hassett reinforced this outlook, "Our expectation is that ... immediately after the handshake, any export controls from the U.S. will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters."
Separately, Citi analyst Christopher Danely raised the stock's price target from $100 to $120, reflecting growing market optimism as the company prepared for its Advancing AI Day on June 12, 2025. The analyst expected AMD to launch its latest AI product and announce new customers such as Amazon Web Services or, potentially, OpenAI.
After the initial pop the shares cooled down to $121.81, up 4.9% from previous close.
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What The Market Is Telling Us
AMD’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 26 days ago when the stock gained 5.4% on the news that the company announced a new $6 billion share buyback program. This added to the approximately $4 billion remaining under the existing program, bringing the total repurchase authorization to around $10 billion. As a reminder, a stock buyback reduces the number of outstanding shares, ensuring that more profits accrue to existing shareholders.
AMD is up 1% since the beginning of the year, but at $121.81 per share, it is still trading 33.8% below its 52-week high of $183.96 from July 2024. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $2,160.
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