BEIJING, CHINA – NOVEMBER 11: A pedestrian walks past the AMD logo outside a commercial building that houses the company’s Beijing office on November 11, 2025, in Beijing, China. Advanced Micro Devices, Inc. (NASDAQ: AMD), a leading U.S. semiconductor company, designs central processing units (CPUs) and graphics processing units (GPUs) used in computers, data centers, and artificial intelligence systems. (Photo by Cheng Xin/Getty Images)
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If you hold Advanced Micro Devices (AMD), this week has been unsettling. The stock hasn’t plummeted like Oracle, but the pressure could be building.
In the last 72 hours, two significant events took place that fundamentally threaten AMD’s standing as the “AI Alternative.” First, the White House reopened the Chinese market to Nvidia. Second, Oracle—arguably AMD’s most vocal supporter—hit an accounting hurdle. See Why You Should Wait Before Buying Oracle Stock.
Let’s examine why the “MI300 Bull Case” is undergoing its toughest challenge yet. This isn’t about chip speeds; it’s about the dwindling window of opportunity.
The Thematic Anchor: The “Second Source” Thesis
AMD’s complete AI valuation relies on one principle: Scarcity.
- The Old Narrative: “Nvidia is out of stock, and they can’t sell to China. Therefore, customers must acquire AMD’s MI325X.” This was genuinely positive for AMD’s visibility and demand, although adoption probably wasn’t overwhelmingly significant.
- The New Reality (Dec 11): That scarcity is disappearing.
- China Unlock: With Nvidia authorized to ship H200s to China (with possible tariffs), the enormous gap that AMD hoped to fill with its “China-compliant” chips has vanished. Alibaba and Tencent are not interested in a “Good Enough” AMD chip; they prefer the Nvidia ecosystem.
- Capex Warning: Oracle’s decline indicates that the “spend at any cost” phase is on hold. As budgets tighten, CIOs cease experimenting with “Alternative” chips (AMD) and revert to the “Standard” (Nvidia).
The Valuation Sanity Test: Pricing the “Forever Number Two”
AMD trades at a premium valuation (58x 2025 Earnings) as the market values it as a future duopoly contender (like Pepsi compared to Nvidia’s Coke).
- The Distortion: Is AMD genuinely Pepsi, or is it RC Cola?
- The Math: To validate 58X earnings, AMD must capture 20% of the AI accelerator market.
- The Oracle Factor: Oracle served as the “Kingmaker” for AMD, boasting about utilizing MI300 clusters for heavy lifting. With Oracle’s stock plummeting 11% due to “Capex Indigestion,” the largest buyer of AMD chips is now under pressure to reduce spending. If Oracle slows down, who will fill the gap? Microsoft is developing its own chips (Maia). Amazon is producing Trainium. The “Merchant Market” for AMD is tightening.
The Black Box: Software Inertia (ROCm vs. CUDA)
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The “China Unlock” announcement on Monday may be revealing AMD’s software shortcomings.
- The Asset: ROCm (AMD’s software suite).
- The Problem: It is improving, but it is not CUDA.
- The Impact: As Nvidia’s access barriers ease, the urgency for developers to convert or optimize for ROCm will naturally diminish. Porting is expensive; teams only do it when they feel compelled or extremely motivated.
- The Risk: Software is influenced by network effects. If developers cease porting code to AMD with the lifting of the “Nvidia Ban,” AMD’s hardware could turn into excellent silicon that no one knows how to utilize.
The Competitive Moat: The “Data Center” CPU Defense
It’s not entirely bleak. We should examine the other aspect of the business: EPYC (Server CPUs).
- The Moat: While AI GPUs face challenges, AMD’s server CPU division is leading in the high-performance segment. Intel continues to struggle to catch up.
- The Stability: Even if Oracle reduces its AI spending, they still require CPUs for cloud operations. This secures a revenue baseline that prevents the stock from collapsing as if it were a pure-play AI bubble.
Our Perspective
AMD currently finds itself caught in a “A Double-Sided Sentiment Hit.” The geopolitical support (China Ban) might not be as substantial as anticipated, and the infrastructure support (Oracle Capex) could be diminishing.
- Bull Case: The “China Unlock” is misleading; tariffs render Nvidia excessively priced, allowing AMD to remain a relevant competitor. Meanwhile, Oracle’s decline is temporary, and they may increase their investment in AMD chips because they are more cost-effective than Nvidia’s, aiding Oracle in resolving its Capex issues.
- Bear Case: Nvidia regains 95% of the China market, and Hyperscalers reduce “experimental” AMD budgets to conserve cash. AMD stock is re-evaluated lower to reflect its status as a “Component Supplier” instead of an “AI Platform” as ROCm adoption falls behind.
The Outlook: Caution is necessary. The thesis may be transitioning from Momentum Growth to Evidence-Based Growth. Until we have evidence that MI325X orders remain robust despite the Nvidia China news, the stock is essentially stagnant.
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