AMD Secures Major AI Chip Order in China, Signaling Strategic Comeback

Advanced Micro Devices (AMD) appears to have achieved a pivotal strategic breakthrough, navigating stringent U.S. export controls to re-enter the lucrative Chinese data center market. The catalyst is a substantial new order from Chinese tech conglomerate Alibaba, marking a significant operational win for the semiconductor designer even as insider trading activity introduces a note of caution.

Market attention has been captured by reports detailing a large-scale procurement by Alibaba. According to these reports, the Chinese internet giant has placed an order for between 40,000 and 50,000 units of AMD's MI308 AI accelerator. The deal is estimated to be worth approximately $675 million.

The technical specifications of the chip are central to this development. The MI308 was specifically engineered to comply with strict U.S. export restrictions. This design enables AMD to resume competition within China's data center sector, a market that had recently seemed almost entirely inaccessible. Analysts at Raymond James interpret this move as confirmation that the necessary regulatory export licenses have been secured. This "China restart" is viewed as essential for AMD to recapture market share from domestic Chinese suppliers and narrow the competitive gap with its rival, Nvidia.

Should investors sell immediately? Or is it worth buying AMD?

Operational Momentum Meets Executive Caution

From an operational standpoint, AMD has already demonstrated strength in the second half of 2025, significantly outperforming Nvidia in share price momentum with a year-to-date gain of nearly 80%. The Alibaba order now serves as critical validation that AMD's modified chips can meet the high-performance demands of major hyperscale cloud customers.

Despite this positive fundamental news, the company's shares showed little movement in recent trading, hovering around $214.86. One potential reason for this muted market reaction could be a notable insider transaction. CEO Lisa Su sold 125,000 shares on December 11 at an average price of $215.14 each. While such sales, valued at nearly $27 million, are often part of pre-planned trading programs, their timing amid recent stock price highs can temper investor enthusiasm.

All eyes now turn to the quarterly earnings report scheduled for early February 2026. Management is expected to officially confirm the Alibaba agreement during this update and provide guidance on the expected revenue contribution from the Chinese market. Should the export ramp-up proceed faster than currently anticipated, it could become a central growth driver for the first half of 2026, providing fundamental support for the company's current valuation.